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. That said, here are three low-volatility stocks to steer clear of and a few better alternatives.

Yum China (YUMC)

Rolling One-Year Beta: 0.57

One of China’s largest restaurant companies, Yum China (NYSE: YUMC) is an independent entity spun off from Yum! Brands in 2016.

Why Does YUMC Worry Us?

1. Disappointing same-store sales over the past two years show customers aren’t responding well to its menu offerings and dining experience
2. Projected sales growth of 4.8% for the next 12 months suggests sluggish demand
3. Challenging supply chain dynamics and bad unit economics are reflected in its low gross margin of 20.1%

Yum China is trading at $43.95 per share, or 16.1x forward P/E. To fully understand why you should be careful with YUMC, check out our full research report (it’s free).

Amneal (AMRX)

Rolling One-Year Beta: 0.68

Founded in 2002 and growing into one of America's largest generic drug producers, Amneal Pharmaceuticals (NASDAQ: AMRX) develops, manufactures, and distributes generic medicines, specialty branded drugs, biosimilars, and injectable products for the U.S. healthcare market.

Why Are We Cautious About AMRX?

1. Below-average returns on capital indicate management struggled to find compelling investment opportunities

At $10 per share, Amneal trades at 14.2x forward P/E. Dive into our free research report to see why there are better opportunities than AMRX.

Intercontinental Exchange (ICE)

Rolling One-Year Beta: 0.56

Starting as an energy trading platform in 2000 before acquiring the iconic New York Stock Exchange in 2013, Intercontinental Exchange (NYSE: ICE) operates global financial exchanges, clearing houses, and provides data services and mortgage technology solutions to financial institutions and corporations.

Why Do We Think Twice About ICE?

1. Incremental sales over the last five years were less profitable as its 8.6% annual earnings per share growth lagged its revenue gains

Intercontinental Exchange’s stock price of $175.99 implies a valuation ratio of 23.9x forward P/E. If you’re considering ICE for your portfolio, see our FREE research report to learn more.

High-Quality Stocks for All Market Conditions

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