A stock with low volatility can be reassuring, but it doesn’t always mean strong long-term performance. Investors who prioritize stability may miss out on higher-reward opportunities elsewhere.
Choosing the wrong investments can cause you to fall behind, which is why we started StockStory - to separate the winners from the losers. That said, here is one low-volatility stock providing safe-and-steady growth and two stuck in limbo.
Two Stocks to Sell:
Burlington (BURL)
Rolling One-Year Beta: 0.77
Founded in 1972 as a discount coat and outerwear retailer, Burlington Stores (NYSE: BURL) is now an off-price retailer that has broadened into general apparel, footwear, and home goods.
Why Is BURL Not Exciting?
- Large revenue base makes it harder to increase sales quickly, and its annual revenue growth of 9.3% over the last three years was below our standards for the consumer retail sector
- Free cash flow margin shrank by 5.1 percentage points over the last year, suggesting the company is consuming more capital to stay competitive
- Below-average returns on capital indicate management struggled to find compelling investment opportunities
Burlington’s stock price of $260.90 implies a valuation ratio of 25.9x forward P/E. To fully understand why you should be careful with BURL, check out our full research report (it’s free for active Edge members).
D.R. Horton (DHI)
Rolling One-Year Beta: 0.42
One of the largest homebuilding companies in the U.S., D.R. Horton (NYSE: DHI) builds a variety of new construction homes across multiple markets.
Why Are We Cautious About DHI?
- Backlog has dropped by 15.5% on average over the past two years, suggesting it’s losing orders as competition picks up
- Earnings per share have contracted by 8.5% annually over the last two years, a headwind for returns as stock prices often echo long-term EPS performance
- Diminishing returns on capital suggest its earlier profit pools are drying up
At $153.56 per share, D.R. Horton trades at 13.8x forward P/E. Check out our free in-depth research report to learn more about why DHI doesn’t pass our bar.
One Stock to Watch:
Xylem (XYL)
Rolling One-Year Beta: 0.92
Formed through a spinoff, Xylem (NYSE: XYL) manufactures and services engineered products across a wide variety of applications primarily in the water sector.
Why Are We Positive On XYL?
- Annual revenue growth of 14.8% over the past two years was outstanding, reflecting market share gains this cycle
- Offerings are mission-critical for businesses and result in a top-tier gross margin of 37.7%
- Earnings growth has trumped its peers over the last five years as its EPS has compounded at 17.7% annually
Xylem is trading at $137.51 per share, or 25.5x forward P/E. Is now the right time to buy? Find out in our full research report, it’s free for active Edge members.
Stocks We Like Even More
The market’s up big this year - but there’s a catch. Just 4 stocks account for half the S&P 500’s entire gain. That kind of concentration makes investors nervous, and for good reason. While everyone piles into the same crowded names, smart investors are hunting quality where no one’s looking - and paying a fraction of the price. Check out the high-quality names we’ve flagged in our Top 5 Growth Stocks for this month. This is a curated list of our High Quality stocks that have generated a market-beating return of 244% over the last five years (as of June 30, 2025).
Stocks that made our list in 2020 include now familiar names such as Nvidia (+1,326% between June 2020 and June 2025) as well as under-the-radar businesses like the once-micro-cap company Tecnoglass (+1,754% five-year return). Find your next big winner with StockStory today for free. Find your next big winner with StockStory today. Find your next big winner with StockStory today.
