1 Safe-and-Steady Stock with Promising Prospects and 2 We Ignore
Stability is great, but low-volatility stocks may struggle to deliver market-beating returns over time as they sometimes underperform during bull markets.
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Finding the right balance between safety and returns isn’t easy, which is why StockStory is here to help. Keeping that in mind, here is one low-volatility stock providing safe-and-steady growth and two that may not deliver the returns you need.
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Rolling One-Year Beta: 0.15
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Pioneering a unique business model in the pharmaceutical industry since 1996, Royalty Pharma (NASDAQ:RPRX) acquires rights to receive portions of sales from successful biopharmaceutical products, providing funding to drug developers without conducting research itself.
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Why Are We Hesitant About RPRX?
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Products and services are facing significant end-market challenges during this cycle as sales have declined by 1.2% annually over the last two years
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Subscale operations are evident in its revenue base of $2.31 billion, meaning it has fewer distribution channels than its larger rivals
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Royalty Pharma’s stock price of $36.30 implies a valuation ratio of 7.1x forward P/E. Read our free research report to see why you should think twice about including RPRX in your portfolio, it’s free.
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Rolling One-Year Beta: 0.69
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As one of the largest business development companies in the United States with over $20 billion in assets, Ares Capital (NASDAQ:ARCC) is a business development company that provides financing solutions to middle-market companies, primarily through direct loans and equity investments.
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Why Should You Sell ARCC?
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Performance over the past two years shows its incremental sales were much less profitable, as its earnings per share fell by 3.6% annually
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At $21.17 per share, Ares Capital trades at 10.5x forward P/E. Dive into our free research report to see why there are better opportunities than ARCC.
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Rolling One-Year Beta: 0.93
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Operating a global network of over 47,000 ATMs and 821,000 point-of-sale terminals across more than 60 countries, Euronet Worldwide (NASDAQ:EEFT) provides electronic payment solutions including ATM services, prepaid product processing, and international money transfer services.
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Why Could EEFT Be a Winner?
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Annual revenue growth of 9.8% over the last five years was above the sector average and underscores its products and services value to customers
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Share repurchases have increased shareholder returns as its annual earnings per share growth of 11.9% exceeded its revenue gains over the last two years
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Market-beating return on equity illustrates that management has a knack for investing in profitable ventures