Stability is great, but low-volatility stocks may struggle to deliver market-beating returns over time as they sometimes underperform during bull markets.

Luckily for you, StockStory helps you navigate which companies are truly worth holding. That said, here is one low-volatility stock that could succeed under all market conditions and two that may not deliver the returns you need.

Two Stocks to Sell:

Taylor Morrison Home (TMHC)

Rolling One-Year Beta: 0.70

Named “America’s Most Trusted Home Builder” in 2019, Taylor Morrison Home (NYSE:TMHC) builds single family homes and communities across the United States.

Why Are We Wary of TMHC?

Demand cratered as it couldn’t win new orders over the past two years, leading to an average 13% decline in its backlog Falling earnings per share over the last two years has some investors worried as stock prices ultimately follow EPS over the long term Free cash flow margin shrank by 9.4 percentage points over the last five years, suggesting the company is consuming more capital to stay competitive

Taylor Morrison Home’s stock price of $57.26 implies a valuation ratio of 6.5x forward price-to-earnings. Check out our free in-depth research report to learn more about why TMHC doesn’t pass our bar.

Pediatrix Medical Group (MD)

Rolling One-Year Beta: 0.42

With a network of approximately 2,620 affiliated physicians caring for some of the most vulnerable patients, Pediatrix Medical Group (NYSE:MD) provides specialized physician services focused on neonatal, maternal-fetal, pediatric cardiology and other pediatric subspecialty care across 37 states.

Why Do We Avoid MD?

Weak comparable store sales trends over the past two years suggest there may be few opportunities in its core markets to open new facilities Forecasted revenue decline of 7.2% for the upcoming 12 months implies demand will fall off a cliff Earnings per share fell by 4.4% annually over the last five years while its revenue grew, showing its incremental sales were much less profitable

At $12.75 per share, Pediatrix Medical Group trades at 8x forward price-to-earnings. Read our free research report to see why you should think twice about including MD in your portfolio, it’s free.

One Stock to Buy:

Monster (MNST)

Rolling One-Year Beta: 0.34

Founded in 2002 as a natural soda and juice company, Monster Beverage (NASDAQ:MNST) is a pioneer of the energy drink category, and its Monster Energy brand targets a young, active demographic.

Why Is MNST a Top Pick?

Excellent operating margin of 27% highlights the efficiency of its business model Robust free cash flow margin of 21.6% gives it many options for capital deployment, and its growing cash flow gives it even more resources to deploy Market-beating returns on capital illustrate that management has a knack for investing in profitable ventures

Story Continues

Monster is trading at $58.28 per share, or 32.1x forward price-to-earnings. Is now the right time to buy? See for yourself in our comprehensive research report, it’s free.

Stocks We Like Even More

Market indices reached historic highs following Donald Trump’s presidential victory in November 2024, but the outlook for 2025 is clouded by new trade policies that could impact business confidence and growth.

While this has caused many investors to adopt a "fearful" wait-and-see approach, we’re leaning into our best ideas that can grow regardless of the political or macroeconomic climate. Take advantage of Mr. Market by checking out our Top 9 Market-Beating Stocks. This is a curated list of our High Quality stocks that have generated a market-beating return of 175% over the last five years.

Stocks that made our list in 2019 include now familiar names such as Nvidia (+2,183% between December 2019 and December 2024) as well as under-the-radar businesses like Axon (+711% five-year return). Find your next big winner with StockStory today for free.

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