Low-volatility stocks may offer stability, but that often comes at the cost of slower growth and the upside potential of more dynamic companies.
Luckily for you, StockStory helps you navigate which companies are truly worth holding. Keeping that in mind, here are two low-volatility stocks that could offer consistent gains and one that may not keep up.
Rolling One-Year Beta: 0.29
Spun off from Merck in 2021 to create a company dedicated to addressing unmet needs in women’s health, Organon (NYSE:OGN) is a global healthcare company focused on improving women’s health through prescription therapies, medical devices, biosimilars, and established medicines.
Why Is OGN Not Exciting?
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Annual sales declines of 2.6% for the past five years show its products and services struggled to connect with the market during this cycle
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Earnings per share decreased by more than its revenue over the last five years, showing each sale was less profitable
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Free cash flow margin shrank by 25.6 percentage points over the last five years, suggesting the company is consuming more capital to stay competitive
At $6.79 per share, Organon trades at 1.8x forward P/E. If you’re considering OGN for your portfolio, see our FREE research report to learn more.
Rolling One-Year Beta: 0.50
Designed to be a one-stop shop for the suburban consumer, Costco (NASDAQ:COST) is a membership-only retail chain that sells groceries, apparel, toys, and household items, often in bulk quantities.
Why Is COST a Good Business?
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Locations open for at least a year are seeing increased demand as same-store sales have averaged 5.6% growth over the past two years
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Massive revenue base of $275.2 billion makes up for its weaker gross margin and makes it a household name that influences purchasing decisions
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Stellar returns on capital showcase management’s ability to surface highly profitable business ventures
Costco is trading at $913.29 per share, or 45.5x forward P/E. Is now the right time to buy? See for yourself in our in-depth research report, it’s free for active Edge members.
Rolling One-Year Beta: 0.61
Founded by a mother seeking treatment for her daughter’s pulmonary arterial hypertension, United Therapeutics (NASDAQ:UTHR) develops and commercializes medications for chronic lung diseases and other life-threatening conditions, with a focus on pulmonary hypertension treatments.
Why Should You Buy UTHR?
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Impressive 19.1% annual revenue growth over the last two years indicates it’s winning market share this cycle
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Strong free cash flow margin of 34.9% enables it to reinvest or return capital consistently, and its recently improved profitability means it has even more resources to invest or distribute
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Returns on capital are climbing as management makes more lucrative bets