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. More about low beta stocks.

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Company	Current Price	Beta	PE Ratio	Market Cap	Volume	Average Volume	Indicator(s)
HRL Hormel Foods	$42.81 -0.3%	0.01	27.10	$23.23 billion	1.17 million	2.20 million	Dividend Increase
CTXS Citrix Systems	$82.90 -2.2%	0.01	33.03	$10.34 billion	1.81 million	1.42 million	News Coverage
INDI indie Semiconductor	$13.47 +1.3%	0.01	3.76	$1.75 billion	698,765	1.04 million	Gap Down
ACI Albertsons Companies	$35.72 +2.6%	0.02	31.61	$16.69 billion	830,040	1.71 million	News Coverage
VALU Value Line	$41.80 -4.1%	0.03	17.27	$399.48 million	5,457	7,526	Short Interest ↑ News Coverage
EIG Employers	$39.70 -2.3%	0.04	8.94	$1.11 billion	83,771	139,214	Analyst Revision Gap Down
PBIP Prudential Bancorp	$14.26 -1.7%	0.04	18.05	$111.14 million	1,196	19,275	Gap Down
DGICA Donegal Group	$13.97 -2.2%	0.06	12.15	$437.67 million	40,237	57,268	Analyst Upgrade Analyst Revision News Coverage
PFHD Professional	$19.29 -0.6%	0.06	11.91	$258.99 million	4,755	38,192	Negative News Gap Down
AOUT American Outdoor Brands	$23.44 -2.3%	0.06	16.62	$330.60 million	62,200	166,409	Short Interest ↓ Gap Down
CHT Chunghwa Telecom	$40.00 -1.7%	0.07	24.84	$31.03 billion	45,460	102,681	Short Interest ↓ Positive News
SLP Simulations Plus	$48.52 -4.9%	0.07	105.48	$977.58 million	98,712	171,695
CHMG Chemung Financial	$45.31 -2.0%	0.08	8.44	$211.33 million	4,211	13,560	Dividend Announcement Analyst Upgrade
ARTNA Artesian Resources	$42.75 -4.3%	0.08	23.75	$402.11 million	13,262	23,206
ATRI Atrion	$735.20 -3.5%	0.09	41.54	$1.32 billion	4,398	6,656	News Coverage
UFCS United Fire Group	$21.44 -4.2%	0.09	39.70	$537.74 million	80,645	76,577	Dividend Announcement Gap Down
PBHC Pathfinder Bancorp	$17.00 +0.1%	0.10	9.71	$77.91 million	736	3,190	Short Interest ↓
AWR American States Water	$92.45 -2.4%	0.11	36.40	$3.41 billion	170,982	178,192	Positive News
FRO Frontline	$6.80 -5.7%	0.12	26.15	$1.34 billion	1.68 million	1.75 million	Upcoming Earnings Gap Down
ARKO Arko	$9.79 -4.6%	0.12	61.19	$1.22 billion	349,501	539,001	News Coverage Gap Down
ACNB ACNB	$29.29 -0.3%	0.12	8.39	$254.68 million	2,722	24,088
STRR Star Equity	$2.61 -1.5%	0.13	32.63	$13.37 million	141,860	391,545	Short Interest ↑
ANAB AnaptysBio	$31.12 -2.1%	0.13	111.14	$856.05 million	119,709	302,749
ZTO ZTO Express (Cayman)	$30.85 -1.9%	0.14	38.09	$19.16 billion	3.45 million	3.52 million
CCOI Cogent Communications	$76.25 -2.9%	0.14	152.50	$3.64 billion	213,830	250,047	Insider Selling
UG United-Guardian	$15.97 -6.6%	0.14	17.74	$73.30 million	12,439	7,012	Dividend Increase Short Interest ↑ Gap Down
VLGEA Village Super Market	$21.87 -1.3%	0.14	15.96	$318.32 million	41,203	35,721	Upcoming Earnings News Coverage Positive News
CTHR Charles & Colvard, Ltd.	$3.10 -2.5%	0.15	7.38	$94.29 million	120,671	391,054	Analyst Upgrade Short Interest ↓ Positive News Gap Down
PHI PLDT	$33.24 -3.4%	0.16	14.91	$7.18 billion	12,749	84,048
JBSS John B. Sanfilippo & Son	$82.91 -3.1%	0.16	14.49	$950.90 million	19,116	40,282
HMNF HMN Financial	$24.01 +0.5%	0.16	7.46	$110.33 million	810	6,427	Short Interest ↓ News Coverage
PFIS Peoples Financial Services	$48.50 -2.9%	0.16	9.94	$347.89 million	11,205	12,457	News Coverage
CWT California Water Service Group	$62.95 -3.2%	0.17	28.61	$3.31 billion	193,640	211,999	Short Interest ↓ Positive News
LANC Lancaster Colony	$157.59 -2.8%	0.18	31.97	$4.34 billion	57,175	92,974	Positive News
CLX Clorox	$174.21 +3.7%	0.18	50.35	$21.40 billion	2.36 million	1.48 million
PSA Public Storage	$327.02 -2.4%	0.18	39.07	$57.34 billion	368,811	719,861
REGN Regeneron Pharmaceuticals	$643.35 -0.7%	0.19	10.27	$69.19 billion	575,586	848,898	Insider Selling
WMK Weis Markets	$62.58 -3.7%	0.19	15.92	$1.68 billion	44,122	91,548
ED Consolidated Edison	$78.67 -0.7%	0.20	23.48	$27.80 billion	1.34 million	2.37 million
DLR Digital Realty Trust	$164.76 -0.9%	0.20	69.52	$46.76 billion	1.04 million	1.41 million	Analyst Report
AAME Atlantic American	$3.97 -1.1%	0.21	6.61	$80.81 million	5,823	777,154
WEC WEC Energy Group	$89.17 -1.7%	0.21	21.44	$28.13 billion	733,926	1.17 million	Insider Selling
PINC Premier	$39.01 -0.9%	0.21	18.40	$4.75 billion	340,906	572,036
SWX Southwest Gas	$69.25 -1.4%	0.21	16.93	$4.18 billion	323,182	483,745	Gap Down
EDRY EuroDry	$20.71 -2.1%	0.21	4.06	$58.90 million	37,556	74,407	Short Interest ↑
CMS CMS Energy	$60.13 -1.5%	0.22	19.98	$17.42 billion	789,679	1.92 million	Analyst Revision
MEC Mayville Engineering	$15.44 -0.9%	0.23	45.41	$315.55 million	54,831	77,985	Short Interest ↓ Positive News Gap Down
HIHO Highway	$4.40 +3.5%	0.23	220.11	$17.72 million	4,952	82,766	Short Interest ↓ News Coverage
TNDM Tandem Diabetes Care	$129.66 -2.4%	0.23	447.10	$8.24 billion	302,916	676,556
SHEN Shenandoah Telecommunications	$26.01 -3.2%	0.23	1.25	$1.30 billion	241,927	232,457	Short Interest ↓
NEM Newmont	$55.94 +0.8%	0.23	22.11	$44.61 billion	4.34 million	6.41 million	Analyst Report Analyst Revision
PRTH Priority Technology	$5.96 +0.3%	0.23	29.80	$412.06 million	25,038	69,097	Short Interest ↑ Gap Down
UTMD Utah Medical Products	$120.33 -3.3%	0.23	31.25	$439.33 million	17,813	10,220	News Coverage
BH Biglari	$147.07 +0.7%	0.23	0.64	$334.73 million	6,640	5,592	Insider Buying
KSPN Kaspien	$12.85 -9.0%	0.24	17.37	$32.04 million	4,998	16,878	Gap Down
QGEN QIAGEN	$56.47 +3.5%	0.24	22.06	$12.87 billion	1.35 million	803,747	Analyst Downgrade Short Interest ↓ Gap Up
FDBC Fidelity D & D Bancorp	$51.79 -3.7%	0.24	12.51	$292.41 million	2,370	4,790	News Coverage Gap Down
HE Hawaiian Electric Industries	$38.76 -2.8%	0.25	17.54	$4.24 billion	152,125	490,368	Short Interest ↓
SBAC SBA Communications	$351.05 -1.0%	0.25	133.48	$38.46 billion	247,180	616,591	Insider Selling
SFM Sprouts Farmers Market	$26.89 +0.4%	0.25	11.39	$3.02 billion	1.34 million	2.32 million
FTS Fortis	$43.71 -1.4%	0.26	21.22	$20.67 billion	226,311	362,300	Dividend Increase Short Interest ↑
HAE Haemonetics	$51.92 -6.1%	0.26	86.53	$2.65 billion	513,943	658,533	Gap Down
GILT Gilat Satellite Networks	$6.75 -4.4%	0.26	6.55	$381.64 million	358,350	1.09 million	Short Interest ↓ Gap Down
NEE NextEra Energy	$86.09 -1.3%	0.26	71.74	$168.92 billion	4.34 million	7.57 million
MGYR Magyar Bancorp	$11.72 -1.8%	0.26	11.60	$83.19 million	3,832	12,356	Dividend Announcement
PEN Penumbra	$250.16 -3.8%	0.26	274.90	$9.35 billion	92,857	269,234	Analyst Upgrade
SCPL SciPlay	$16.39 -1.4%	0.27	18.84	$2.10 billion	178,280	591,160	Short Interest ↓ Gap Down
PNW Pinnacle West Capital	$65.26 -2.3%	0.27	12.90	$7.36 billion	875,845	989,677	Short Interest ↑
AWK American Water Works	$170.31 -1.8%	0.27	40.55	$30.92 billion	399,319	823,853	Short Interest ↑
FLO Flowers Foods	$26.46 -2.1%	0.28	25.44	$5.59 billion	616,578	1.19 million	Dividend Announcement Analyst Revision
PCTI PCTEL	$5.64 -1.2%	0.28	62.67	$102.87 million	17,048	149,212
SWKH SWK	$19.11 -0.5%	0.28	9.32	$244.78 million	28,208	18,421
OVBC Ohio Valley Banc	$28.41 +0.4%	0.28	9.63	$135.54 million	6,979	13,964	Short Interest ↑ News Coverage
LPRO Open Lending	$23.90 -4.0%	0.28	40.51	$3.02 billion	577,953	1.02 million
AMEH Apollo Medical	$94.56 -3.8%	0.29	59.47	$5.25 billion	211,052	391,944	Gap Down
ERIC Telefonaktiebolaget LM Ericsson (publ)	$10.12 -3.1%	0.29	14.46	$33.74 billion	4.36 million	6.38 million	Short Interest ↑ Gap Down
EXR Extra Space Storage	$198.79 -2.7%	0.29	37.02	$26.62 billion	458,657	733,303	Dividend Announcement
AMN AMN Healthcare Services	$116.49 +1.6%	0.29	25.38	$5.51 billion	402,163	355,757
CNF CNFinance	$4.95 +8.6%	0.30	8.39	$339.48 million	278,268	105,793	Earnings Report Analyst Upgrade Short Interest ↓ News Coverage Gap Down High Trading Volume
HCSG Healthcare Services Group	$17.77 -3.6%	0.30	18.51	$1.32 billion	550,222	723,416	Gap Down
SAFT Safety Insurance Group	$79.24 -0.4%	0.30	7.85	$1.19 billion	54,075	64,124	Positive News
JCTCF Jewett-Cameron Trading	$10.63 +2.0%	0.30	8.57	$37.09 million	5,887	4,653	Upcoming Earnings Short Interest ↑ News Coverage
DUK Duke Energy	$99.28 -0.9%	0.30	25.59	$76.38 billion	1.81 million	3.02 million
ICCH ICC	$16.50	0.30	7.78	$54.29 million	42	546
COR CoreSite Realty	$170.71 -0.3%	0.30	82.87	$7.55 billion	611,282	404,825	Analyst Report
MITK Mitek Systems	$16.95 -2.5%	0.30	89.22	$746.21 million	278,909	567,621
AGR Avangrid	$51.67 -1.0%	0.30	23.59	$20.01 billion	230,749	537,894
MSVB Mid-Southern Bancorp	$14.95	0.30	30.51	$45.15 million	21	4,590	Short Interest ↑ Negative News
RMD ResMed	$251.21 -1.5%	0.30	73.67	$36.61 billion	240,997	587,596	Insider Selling
AMT American Tower	$262.87 -1.0%	0.30	47.79	$119.71 billion	1.16 million	1.81 million
WSBF Waterstone Financial	$20.89 -2.7%	0.31	5.82	$520.70 million	79,029	80,951	Insider Selling News Coverage Negative News
SR Spire	$61.49 -2.1%	0.31	12.86	$3.18 billion	254,474	320,510	Earnings Report Analyst Downgrade
BOMN Boston Omaha	$29.78 -0.3%	0.31	9.25	$880.77 million	128,651	143,581	Gap Down
AEE Ameren	$84.51 -1.5%	0.31	22.12	$21.73 billion	644,833	1.28 million	Analyst Revision
NI NiSource	$24.99 -1.9%	0.32	22.12	$9.81 billion	1.71 million	3.66 million
AEP American Electric Power	$82.55 -1.5%	0.32	17.23	$41.58 billion	1.64 million	2.81 million
GOLD Barrick Gold	$19.38 -0.1%	0.32	17.30	$34.47 billion	13.97 million	17.43 million	Analyst Report Analyst Revision Gap Up
SJM J. M. Smucker	$130.95 -1.0%	0.32	18.42	$14.19 billion	579,610	934,488	Earnings Report Analyst Report Analyst Revision News Coverage
CAJ Canon	$22.46 -1.5%	0.32	12.21	$23.89 billion	136,455	304,369
MLAB Mesa Laboratories	$312.80 -0.8%	0.32	336.35	$1.63 billion	27,065	28,172

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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