Low Beta Stocks

Beta is the result of a calculation that measures the relative volatility of a stock in correlation to a particular standard. For U.S. stocks that standard is usually, but not always, the S&P 500. Beta is a form of regression analysis and it can be useful for investors regardless of their risk tolerance. Beta is considered one of the few data points that can be beneficial for practitioners of fundamental analysis and technical analysis. This page lists stocks that have unusually low beta calculations, meaning there is little correlation between the price moves of these stocks and the S&P 500. Learn more.

Company	Beta	PE Ratio	Market Cap	Current Price	Price Change	Volume	Average Volume	Indicator(s)
TR Tootsie Roll Industries	0.01	32.38	$2.24 billion	$32.86	flat	157,200	197,691
EHTH eHealth	0.03	37.12	$2.69 billion	$110.98	+3.1%	416,237	823,418
AUCOY POLYMETAL INTL/S	0.05	15.92	$9.48 billion	$19.90	-1.3%	2,057	1,775	Analyst Report
GSAH GS ACQUISITION /SH CL A	0.07	126.19	$767.63 million	$13.88	+0.4%	2.08 million	1.79 million
CYAGF Oriental Land	0.07	52.23	$5.99 billion	$47.53	flat	3	0	High Trading Volume
UNICY UNICHARM CORP/S	0.08	54.59	$26.64 billion	$9.28	+2.1%	87,882	281,612	Analyst Revision
VG Vonage	0.10	34.50	$2.37 billion	$11.04	-3.1%	2.15 million	3.95 million
SSMXY SYSMEX CORP/ADR	0.11	43.86	$15.49 billion	$37.28	+0.5%	10,800	25,567
PSA Public Storage	0.12	26.58	$33.80 billion	$195.37	flat	555,700	1.16 million	Analyst Report Decrease in Short Interest
CHT Chunghwa Telecom	0.12	27.60	$29.59 billion	$37.81	-0.3%	108,586	133,025
REMYY REMY COINTREAU/ADR	0.12	52.96	$7.21 billion	$14.30	-2.1%	11,643	8,313	Analyst Report Heavy News Reporting
WMK Weis Markets	0.12	15.93	$1.29 billion	$47.46	flat	93,100	133,046
CRHKY China Resources Beer Holdings CoLtd	0.12	91.17	$17.75 billion	$10.94	flat	0	764
NTTYY Nippon Telegraph & Telephone	0.12	11.42	$86.97 billion	$23.30	+0.8%	143,300	207,571
SJM J M Smucker	0.13	15.14	$11.95 billion	$103.39	flat	642,400	1.12 million	Increase in Short Interest
HRIBF Horiba	0.13	16.48	$2.02 billion	$54.40	-5.9%	700	350	High Trading Volume
EIG Employers	0.14	13.69	$872.77 million	$28.89	flat	235,600	224,438
IMIAY IMI PLC/S	0.14	12.20	$3.09 billion	$22.70	flat	994	273	High Trading Volume
COLD AmeriCold Realty Trust	0.14	96.71	$7.42 billion	$36.75	-0.7%	867,152	2.08 million	Analyst Downgrade Heavy News Reporting
IIPZF Interrent Real Estate Investment Trust	0.15	4.20	$1.44 billion	$10.50	flat	0	466
YORW York Water	0.16	38.62	$605.16 million	$46.34	+2.4%	49,346	52,212	Analyst Downgrade
HSY Hershey	0.16	24.15	$26.43 billion	$127.75	+0.8%	661,415	1.26 million	Increase in Short Interest
HE Hawaiian Electric Industries	0.16	18.80	$3.91 billion	$35.54	flat	320,500	612,126
WILYY DEMANT A S/ADR	0.16	29.07	$6.30 billion	$13.08	flat	80	112
GLAPY Glanbia	0.16	11.70	$3.41 billion	$57.66	flat	0	12	Analyst Downgrade
SR Spire	0.17	22.22	$3.29 billion	$65.55	+3.7%	273,686	306,359
ATRI Atrion	0.17	32.45	$1.17 billion	$631.08	flat	3,600	7,032
WEC WEC Energy Group	0.17	23.93	$27.99 billion	$88.05	+0.7%	1.33 million	1.89 million
KDDIY KDDI CORP/ADR	0.17	12.02	$71.13 billion	$15.39	+1.7%	52,025	186,018
UTL Unitil	0.17	20.23	$660.15 million	$44.71	+2.2%	40,925	71,532
SVNDY SEVEN & I HOLDI/ADR	0.17	13.77	$28.28 billion	$15.70	-1.4%	156,179	103,593	Analyst Downgrade
LPRO HL Acquisitions	0.18	120.93	$1.45 billion	$15.72	flat	313,000	541,500
LNT Alliant Energy	0.18	25.00	$12.33 billion	$48.25	flat	1.35 million	1.71 million	Dividend Announcement Heavy News Reporting
CMS CMS Energy	0.18	23.79	$17.00 billion	$59.47	+0.8%	1.92 million	2.36 million	Analyst Report
FNLPF Fresnillo	0.18	51.46	$8.70 billion	$11.84	+0.3%	16,098	14,632	Heavy News Reporting
EXR Extra Space Storage	0.18	28.59	$12.35 billion	$95.21	0.0%	429,600	1.14 million	Analyst Report
SHEN Shenandoah Telecommunications	0.19	44.71	$2.47 billion	$48.73	flat	123,000	218,398
ED Consolidated Edison	0.19	18.48	$24.20 billion	$71.71	flat	1.70 million	2.35 million	Heavy News Reporting
DLR DIGITAL RLTY TR/SH	0.19	52.83	$39.71 billion	$147.39	+0.2%	1.73 million	2.96 million	Insider Selling
FUJIY FUJIFILM Holdings Co. American Depositary Shares	0.20	15.13	$17.47 billion	$42.67	-1.5%	20,600	60,136	Heavy News Reporting
AWK American Water Works	0.20	38.22	$23.85 billion	$133.39	+2.1%	715,682	1.20 million	Increase in Short Interest
DWHHF Deutsche Wohnen	0.20	9.36	$16.43 billion	$45.66	flat	0	1,196
NEE NextEra Energy	0.21	35.96	$123.96 billion	$259.60	+3.0%	2.52 million	2.79 million
COG Cabot Oil & Gas	0.21	14.81	$6.79 billion	$17.03	-0.1%	3.64 million	8.57 million	Analyst Revision
CORE Core-Mark	0.22	18.18	$1.07 billion	$23.81	flat	226,000	302,618	Analyst Upgrade
TRUMY TERUMO CORP/ADR	0.22	35.82	$28.37 billion	$36.89	-0.8%	3,827	21,732
SFM Sprouts Farmers Market	0.22	15.51	$2.89 billion	$24.35	-0.7%	1.85 million	2.49 million	Analyst Downgrade Increase in Short Interest Heavy News Reporting
HCP HCP	0.22	14.76	$13.19 billion	$26.86	+0.0%	4.30 million	2.80 million
SCMWY Swisscom	0.22	15.85	$27.09 billion	$52.13	-0.3%	6,167	11,101	Heavy News Reporting
GOLD Barrick Gold	0.22	11.25	$49.06 billion	$27.11	-1.7%	11.54 million	18.99 million
LRN K12	0.22	59.53	$1.41 billion	$33.93	+4.6%	1.06 million	596,687	Analyst Downgrade Increase in Short Interest
FTS Fortis	0.22	17.96	$17.52 billion	$37.72	flat	845,200	535,946	Analyst Upgrade Increase in Short Interest
CCOI Cogent Communications	0.23	99.83	$3.83 billion	$81.86	flat	240,800	393,155	Decrease in Short Interest
SOMLY SECOM LTD/ADR	0.23	25.02	$20.37 billion	$21.52	+0.6%	8,162	22,853
LANC Lancaster Colony	0.23	30.20	$4.31 billion	$153.12	flat	131,800	171,826
FCN FTI Consulting	0.24	20.13	$4.17 billion	$111.30	-2.3%	541,757	461,928
FBAK First National Bank Alaska	0.24	10.52	$586.04 million	$186.85	+1.0%	320	247	Heavy News Reporting
BGS B&G Foods	0.24	18.36	$1.55 billion	$24.97	+2.1%	638,466	1.64 million	Analyst Revision Heavy News Reporting
AEE Ameren	0.25	23.59	$18.50 billion	$74.54	+1.2%	1.19 million	1.93 million	Analyst Report
IIJIY Internet Initiative Japan	0.25	41.61	$1.55 billion	$17.06	-0.8%	640	2,942	Analyst Downgrade Heavy News Reporting
AU AngloGold Ashanti	0.25	34.56	$13.02 billion	$31.45	flat	3.86 million	3.83 million
MSEX Middlesex Water	0.26	31.04	$1.12 billion	$63.64	+1.8%	51,614	70,101	Analyst Downgrade Heavy News Reporting
SWX Southwest Gas	0.26	19.77	$3.76 billion	$68.99	+3.0%	345,430	450,517	Heavy News Reporting
EXPO Exponent	0.26	48.88	$4.07 billion	$78.21	+0.6%	176,123	294,649	Analyst Downgrade
ADRNY Koninklijke Ahold	0.26	13.63	$30.10 billion	$27.25	-1.3%	60,800	197,218
CHYCY Casio Computer	0.26	5.47	$694.03 million	$2.68	flat	0	56
OGS ONE Gas	0.26	21.35	$3.99 billion	$74.07	flat	220,600	327,087	Increase in Short Interest
ALNPY ANA HOLDINGS IN/S	0.26	7.64	$7.41 billion	$4.47	+2.1%	126	4,319
EXC Exelon	0.26	11.74	$36.14 billion	$36.62	flat	5.43 million	6.65 million
LLY Eli Lilly And Co	0.26	27.00	$159.19 billion	$163.36	-1.9%	2.25 million	4.25 million	Insider Selling
RTOXY ROTORK PLC/ADR	0.27	22.00	$3.17 billion	$14.52	+25.7%	1,400	70	High Trading Volume
SJW SJW Group	0.27	88.38	$1.76 billion	$60.98	flat	208,300	139,784
EQC Equity Commonwealth	0.27	5.61	$3.80 billion	$31.24	flat	464,300	937,863
CPK Chesapeake Utilities	0.27	21.31	$1.37 billion	$84.60	+2.7%	59,426	75,532	Decrease in Short Interest Heavy News Reporting
LUXTY Luxottica Group	0.27	24.37	$27.07 billion	$55.80	flat	2,998	11,391	Heavy News Reporting
CLX Clorox	0.27	33.69	$28.95 billion	$229.76	+0.1%	892,835	2.00 million	Analyst Report Decrease in Short Interest
FFG FBL Financial Group	0.27	9.70	$855.78 million	$35.01	+5.0%	67,163	38,321
COR CoreSite Realty	0.28	61.71	$4.71 billion	$122.81	-1.2%	195,566	455,194	Analyst Upgrade
CLPBY COLOPLAST A/S/ADR	0.28	57.45	$35.10 billion	$16.09	-1.0%	30,297	79,693
WMT Walmart	0.28	24.84	$362.01 billion	$130.68	+2.3%	14.74 million	9.52 million	Analyst Report Insider Selling Unusual Options Activity
NI NiSource	0.28	47.81	$8.95 billion	$22.95	flat	2.89 million	3.62 million
CUBE CubeSmart	0.28	30.42	$5.37 billion	$27.38	-0.1%	855,351	1.83 million
AGR Avangrid	0.28	18.72	$13.28 billion	$43.80	+3.0%	748,285	730,159	Decrease in Short Interest
ADC Agree Realty	0.29	32.78	$3.44 billion	$62.93	flat	670,500	690,950
LNN Lindsay	0.29	40.23	$999.72 million	$94.54	+4.1%	114,252	89,324	Dividend Announcement Analyst Revision
TMUS T-Mobile Us	0.30	26.30	$148.34 billion	$107.05	+0.8%	4.56 million	6.65 million	Analyst Report Decrease in Short Interest
CRPJY CHINA RESOURES/ADR	0.30	6.95	$5.84 billion	$18.20	flat	30	397
BKH Black Hills	0.30	18.48	$3.63 billion	$56.72	flat	421,100	432,503
STMP Stamps.com	0.30	62.57	$3.49 billion	$209.60	+0.1%	165,477	479,956	Insider Selling
WJRYY WEST JAPAN RWY/S	0.30	8.59	$10.07 billion	$50.26	-1.6%	11,791	12,736	Heavy News Reporting
CME CME Group	0.30	24.71	$60.27 billion	$164.59	-0.6%	1.96 million	2.19 million	Analyst Report Analyst Revision Heavy News Reporting
JBSS John B. Sanfilippo & Son	0.31	17.11	$960.37 million	$81.97	flat	52,400	86,657	Heavy News Reporting
RLI RLI	0.31	53.18	$3.48 billion	$75.52	flat	177,400	268,023	Insider Selling Decrease in Short Interest Analyst Revision
BCMXY BK COMMUNICATIO/ADR	0.31	4.08	$44.14 billion	$14.86	+1.9%	100	721
DUK Duke Energy	0.31	16.07	$59.02 billion	$81.32	+2.0%	2.55 million	4.06 million	Dividend Increase
ACA Arcosa	0.31	16.18	$1.90 billion	$38.99	+3.5%	169,684	350,485
ATO Atmos Energy	0.31	21.28	$12.13 billion	$97.69	flat	818,900	1.03 million
POR Portland General Electric	0.31	16.98	$3.71 billion	$42.11	+3.9%	551,494	768,161
OTTR Otter Tail	0.32	17.64	$1.54 billion	$37.39	flat	129,400	133,214	Analyst Downgrade Decrease in Short Interest Heavy News Reporting
ALE ALLETE	0.32	16.08	$2.91 billion	$56.28	flat	617,400	390,454

What Are Low Beta Stocks

Many retail investors assume that you can’t predict the stock market. And since you can’t predict it, they assume that investing in stocks carries a certain amount of risk. Well, as it turns out, there is a way to assess the risk of a particular security: it’s called beta. Low beta stocks are those securities that carry the lowest amount of risk.

How to Use Low Beta Stocks to Minimize Risk and Increase Returns

• What Is the Beta of a Stock?
• How to Calculate Beta
• Low Beta Strategy
• How to Reduce Risk in Your Portfolio
• Is It Smart to Invest in Low Beta Stocks?

Beta is essentially a measure of a stock’s volatility. Risk level is one of the most important stats to analyze in terms of investing in stocks. A comparison of a stock’s risk factor to your own level of risk tolerance will help you know whether to buy, sell, or avoid a certain security. Beta is the number that will help you understand a stock’s level of risk and make those decisions.

What Is the Beta of a Stock?

In the simplest terms, beta is a tool that compares how volatile a stock is in comparison to the overall market. The stock market is the “control” and has a definitive benchmark beta of 1.0, while each individual security is the “variable,” with a beta that varies in terms of how much the stock moves around.

A stock that is more volatile than the market has a beta of more than 1.0, while a stock that is less volatile than the market has a beta of less than 1.0. If you’re a short-term trader riding the market waves and looking at stock market gainers, stock beta can let you know which securities might be the riskiest—then you can decide whether or not to get involved.

As you can see from this explanation, risky stocks are not the only ones that carry risk. Every one of the individual stocks can be viewed as a risky stock to some degree, even if the degree is negligible. Even in bull markets, when it seems like the sky’s the limit forever, it’s impossible for a stock to mirror the benchmark.

How to Calculate Beta

The beta of a stock is calculated using regression analysis. In short, regression analysis is all about comparing one stable variable with other changing variables. The formula for calculating a stock’s beta is simple in theory—beta is found by dividing covariance by variance.

Covariance represents how similar or dissimilar two numbers are in their movements—in this case, a stock is being compared to the market. Positive numbers indicate that their movement is similar. Negative numbers indicate that their movements are different.

Variance represents how much the “control” variable bounces around in comparison to its mean—its normal state. To keep it short and sweet, a stock’s beta is calculated with the intention of assessing how similar or divergent a stock’s movement is in comparison to the market—and thereby determining its volatility. Beta, in turn, can be worked into a complex equation to create a Capital Asset Pricing Model (CAPM). This equation helps calculate the expected return of an asset, using its risk-free rate as a starting point (a hypothetical rate of return involving no risk).

Beyond beta, other formulas, such as the Sharpe Ratio—which uses standard deviation—can help investors determine how much additional yield they’ll get for every increase per unit of risk. Then there is tracking error, which helps investors understand how much performance has deviated from the intended benchmark.

As you can see, beta is the gateway stat for an in-depth, computational way of growing equity through leveraging statistical opportunities in the stock market. 

Low Beta Strategy

Low Beta Strategy focuses on investing in securities that have a low beta. These are stocks issued by companies in a sector like consumer goods, food, and utilities. This type of asset tends to avoid wild fluctuations because its line of business is both necessary and consistent. For example, utility companies exert a relative monopoly over their local region and face little competition in their sector.

Low Beta stocks are safer in terms of price when the market is down—they match the market, and don’t wildly plummet while the market is coasting. However, when the market is up, the same logic applies: these stocks gain less than some of their more volatile counterparts.

Some investment strategies actually involving investing in both low and high beta stocks simultaneously. Stocks with a higher beta—which can experience greater price fluctuations—can present opportunities for big gains through short-term trading of these volatility stocks. To offset potential losses, the investor will also buy into stocks with a lower beta and hold onto them for longer periods of time. This statistical arbitrage strategy is referred to as the bet against beta.

How to Reduce Risk in Your Portfolio

Unfortunately, beta is not a catchall indicator that can prevent losing your earnings to risky investments. While beta is a mathematical measure of how volatile a stock is in comparison to the market, it says nothing about other factors, like how a company operates, its debt, or current events that can affect its operations—such as its potential in regard to future earnings.

For example, a company in a stable industry like utilities can be poorly run, on the brink of bankruptcy, and facing a cataclysmic shutdown due to a recent energy-related event—but because it’s historically moved in close tandem with the overall market, it’s beta is low. Doesn’t sound like a good investment, does it?

One way to reduce risk in your portfolio is to diversify your investments. In terms of stocks, this can mean diversifying your portfolio through a range of companies and industries. However, if you want to truly minimize risk, the majority of your portfolio should be invested in stable, established, non-speculative securities, and preferably ones that pay good dividends or offer opportunities for growth.

One of the easiest ways to avoid risk is to invest in mutual funds or ETFs. This type of fund pools money from a number of investors. With a larger amount of money to play with, mutual fund managers can spread it out over a broader range of securities than each individual investor would be able to buy on their own. You can also diversify risk by investing in different types of asset classes. Between stocks, bonds, commodities, real estate, and business ownership, there are a number of vehicles for producing cash flow. A capital asset like a paid-off rental property can even produce free cash flow, unencumbered by expenses (this is every investor’s golden egg).

If your money is diversified, when one of your investments takes a hit, you won’t have to lose all your eggs—you’ve placed them in different baskets. While much ink has been spilled about which type of asset can consistently outperform the others in terms of growth, everyone can agree that at different times one asset outperforms the others; they all carry a degree of historical volatility (even real estate). 

If you do want to pick out which stock comprises your portfolio, another strategy for reducing risk is to invest in established, stable companies—but these companies are stable beyond their beta score. Large blue-chip companies, like those you’ll find in Warren Buffet’s portfolio, have been around for decades. They are well run, well-financed, and have low amounts of debt. Beta says nothing about the degree of competence with which a company is run, although competently-run, long-standing companies usually do have a lower beta score.

Even if you’re trying to avoid too much risk, most financiers would agree that it’s okay to take a small percentage of your portfolio (financial experts such as Benjamin Graham have suggested no more than 5%) and look at cheap stocks to buy. These stocks might be riskier, but they can also provide good returns if they work out. If they don’t, your losses will be marginal.

Is It Smart to Invest in Low Beta Stocks?

While beta is used to analyze risk, it does have some shortcomings. As mentioned, beta is a comparative statistic that says nothing about how a company is run. It’s been described by analysts as a sort of rearview mirror, reflecting what’s behind, but not necessarily what’s ahead (which, by contrast, is very impacted by the degree of managerial competence and current events).

That said, beta can be a good tool for short-game investors looking to minimize risk. For long-term investors, it’s not necessarily that useful.

Moreover, beta is a number that says nothing about a stock’s price movement in terms of whether it’s going up or down. All beta tells you is a stock’s volatility relative to the market. This is especially problematic in light of the fact that investors, especially short-term traders, make their moves based on stock prices. However, in conjunction with other stats that give a more complete picture of a stock and its performance, beta can be a useful tool for assessing a security’s level of risk—for short term investors. Long-term investors will want to get a more complete picture of a company, how it’s run, and its level of debt before making an investment.

Investors should not just look at a stock’s beta, but also examine their own level of risk tolerance. Younger investors building a retirement portfolio can afford to take on more risks. After all, they have decades of investment ahead of them. Older investors nearing retirement want to avoid risk and do what they can to stabilize their portfolio as much as possible since it will become a source of income.

There are many strategies for investing in stocks, and they all depend on the investor's preferred mode of gain. A dividend investing strategy can turn rivulets of pennies into a mighty dividend stream, which is great for investors who want passive income. Day trading is great for investors who are skilled enough to leverage swings in the most volatile stocks at the drop of a hat. Other investors might find themselves somewhere between the long game and the short game, figuring out the best growth stocks to scoop up and sell at a profit weeks or months later.

Institutional investors may make a beta calculation as part of their equity and growth strategy, but it’s not the only tool they leverage for assessing how to respond to systematic risk. They do an in-depth micro and macro analysis of stats like market capitalization and general market volatility. Investors also perform fundamental and financial analysis of a company to consider future growth and dividend yield.

Low Beta Stocks

Beta tells you how risky a stock is by comparing its activity to that of the market. It’s important to combine financial signifiers like beta and even professional analyst ratings with fundamental analysis of a company. Alternatively, you can turn over investment decisions to a money manager.

Assessing the balance between risk and reward as it relates to financial gain is the bread and butter of short-term trading. But if short-term trading is not for you, you may consider other strategies such as searching for dividend-paying stocks, the snowballing equity of which can be rolled back into more dividend stocks. Retail investors can also piggyback invest by mimicking the portfolio of established investors with a track record of success. These strategies can be a much easier way for the average investor to increase their stock market earnings than attempting to leverage stock market beta. However, if you are looking to leverage short positions through day trading or similarly short-term asset growth, beta can be a useful tool for determining the risk of a particular security.

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