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.

Luckily for you, StockStory helps you navigate which companies are truly worth holding. Keeping that in mind, here are three low-volatility stocks that don’t make the cut and some better opportunities instead.

Calavo (CVGW)

Rolling One-Year Beta: 0.70

A trailblazer in the avocado industry, Calavo Growers (NASDAQ:CVGW) is a pioneering California-based provider of high-quality avocados and other fresh food products.

Why Are We Wary of CVGW?

Annual sales declines of 14.7% for the past three years show its products struggled to connect with the market Revenue base of $688.3 million puts it at a disadvantage compared to larger competitors exhibiting economies of scale Easily substituted products (and therefore stiff competition) result in an inferior gross margin of 10.6% that must be offset through higher volumes

At $26.73 per share, Calavo trades at 15.7x forward price-to-earnings. Dive into our free research report to see why there are better opportunities than CVGW.

PepsiCo (PEP)

Rolling One-Year Beta: -0.01

With a history that goes back more than a century, PepsiCo (NASDAQ:PEP) is a household name in food and beverages today and best known for its flagship soda.

Why Do We Think Twice About PEP?

Scale is a double-edged sword because it limits the company's growth potential compared to its smaller competitors, as reflected in its below-average annual revenue increases of 4.2% for the last three years Falling unit sales over the past two years imply it may need to invest in product improvements to get back on track Estimated sales growth of 2% for the next 12 months implies demand will slow from its three-year trend

PepsiCo is trading at $133.65 per share, or 16x forward price-to-earnings. Check out our free in-depth research report to learn more about why PEP doesn’t pass our bar.

UniFirst (UNF)

Rolling One-Year Beta: 0.55

With a fleet of trucks making weekly deliveries to over 300,000 customer locations, UniFirst (NYSE:UNF) provides, rents, cleans, and maintains workplace uniforms and protective clothing for businesses across various industries.

Why Do We Think UNF Will Underperform?

Sales are projected to remain flat over the next 12 months as demand decelerates from its two-year trend Incremental sales over the last five years were much less profitable as its earnings per share fell by 2.7% annually while its revenue grew ROIC of 7.3% reflects management’s challenges in identifying attractive investment opportunities, and its falling returns suggest its earlier profit pools are drying up

Story Continues

UniFirst’s stock price of $178.09 implies a valuation ratio of 22x forward price-to-earnings. To fully understand why you should be careful with UNF, check out our full research report (it’s free).

Stocks We Like More

The market surged in 2024 and reached record highs after Donald Trump’s presidential victory in November, but questions about new economic policies are adding much uncertainty for 2025.

While the crowd speculates what might happen next, we’re homing in on the companies that can succeed regardless of the political or macroeconomic environment. Put yourself in the driver’s seat and build a durable portfolio by checking out 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 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 Comfort Systems (+751% five-year return). Find your next big winner with StockStory today for free.

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