3 low-volatility stocks we’re skeptical of

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

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 that don't make the cut and some better opportunities instead.

Laureate Education (LAUR)

Rolling One-Year Beta: 0.15

Founded in 1998 by Douglas L. Becker and based in Miami, Laureate Education (NASDAQ:LAUR) is a global network of higher education institutions.

Why Do We Think LAUR Will Underperform?

1. Demand for its offerings was relatively low as its number of enrolled students has underwhelmed

2. Capital intensity will likely increase as its free cash flow margin is anticipated to drop by 1.7 percentage points over the next year

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

Laureate Education's stock price of $38.31 implies a valuation ratio of 17.5x forward P/E. To fully understand why you should be careful with LAUR, check out our full research report (it's free) .

S&P Global (SPGI)

Rolling One-Year Beta: 0.68

Tracing its roots back to 1860 when it published the first railroad industry manual, S&P Global (NYSE:SPGI) provides credit ratings, market intelligence, commodity data, automotive analytics, and financial indices that help investors and businesses make decisions.

Why Are We Wary of SPGI?

1. Annual sales growth of 3.8% over the last two years lagged behind its financials peers as its large revenue base made it difficult to generate incremental demand

2. Earnings growth over the last five years fell short of the peer group average as its EPS only increased by 8.5% annually

At $441.93 per share, S&P Global trades at 23.3x forward P/E. Check out our free in-depth research report to learn more about why SPGI doesn't pass our bar .

National Bank Holdings (NBHC)

Rolling One-Year Beta: 0.36

Operating under familiar local brands like Community Banks of Colorado, Bank Midwest, and Bank of Jackson Hole, National Bank Holdings (NYSE:NBHC) operates regional banks across Colorado, Kansas, Missouri, Wyoming, Texas, and other western states, offering commercial, business, and consumer banking services.

Why Are We Out on NBHC?

1. Annual revenue growth of 6.1% over the last two years was below our standards for the banking sector

2. Performance over the past five years shows its incremental sales were much less profitable, as its earnings per share fell by 2.5% annually

3. 1.8% annual tangible book value per share growth over the last five years was slower than its banking peers