Low-volatility stocks may offer stability, but that often comes at the cost of slower growth and the upside potential of more dynamic companies.
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 are three low-volatility stocks to steer clear of and a few better alternatives.
The Hanover Insurance Group (THG)
Rolling One-Year Beta: 0.07
Founded in 1852 during a time when fire insurance was crucial for protecting businesses and homes, The Hanover Insurance Group (NYSE: THG) provides property and casualty insurance products through independent agents, serving individuals, small businesses, and mid-sized companies.
Why Are We Wary of THG?
- Sales trends were unexciting over the last two years as its 4.9% annual growth was below the typical insurance company
- Sluggish 4.1% annualized growth in net premiums earned over the last two years indicates the firm trailed its insurance peers
- Capital trends were unexciting over the last five years as its 3.6% annual book value per share growth was below the typical insurance firm
The Hanover Insurance Group’s stock price of $228.21 implies a valuation ratio of 2.1x forward P/B. Dive into our free research report to see why there are better opportunities than THG.
Encore Capital Group (ECPG)
Rolling One-Year Beta: 0.33
Operating in the often misunderstood world of debt collection since 1999, Encore Capital Group (NASDAQ: ECPG) purchases portfolios of defaulted consumer debt at deep discounts and works with individuals to recover these obligations while helping them toward financial recovery.
Why Does ECPG Worry Us?
- 3.1% annual revenue growth over the last five years was slower than its financials peers
- Underwhelming 7% return on equity reflects management’s difficulties in finding profitable growth opportunities
- 5× net-debt-to-EBITDA ratio makes lenders less willing to extend additional capital, potentially necessitating dilutive equity offerings
At $102.50 per share, Encore Capital Group trades at 1.8x forward P/B. Check out our free in-depth research report to learn more about why ECPG doesn’t pass our bar.
Ingredion (INGR)
Rolling One-Year Beta: 0.24
Known for its ability to turn ordinary corn into thousands of different food ingredients, Ingredion (NYSE: INGR) transforms grains, fruits, vegetables and other plant-based materials into specialty starches, sweeteners and other ingredients for food, beverage and industrial markets.
Why Do We Think Twice About INGR?
- Annual sales declines of 4.2% for the past three years show its products struggled to connect with the market
- Projected sales for the next 12 months are flat and suggest demand will be subdued
- Capital intensity has ramped up over the last year as its free cash flow margin decreased by 6.1 percentage points
Ingredion is trading at $96.05 per share, or 9x forward P/E. If you’re considering INGR for your portfolio, see our FREE research report to learn more.
Stocks We Like More
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Stocks that made our list in 2020 include now familiar names such as Nvidia (+1,460% between June 2020 and June 2025) as well as under-the-radar businesses like the once-micro-cap company Tecnoglass (+1,552% between June 2020 and June 2025). Find your next big winner with StockStory today.
