Up to date on June twenty sixth, 2025 by Bob CiuraSpreadsheet knowledge up to date every day
On the planet of investing, volatility issues. Traders are reminded of this each time there’s a downturn within the broader market and particular person shares which might be extra risky than others expertise huge swings in value in each instructions.
That volatility can improve the danger in a person’s inventory portfolio relative to the broader market.
The volatility of a safety or portfolio towards a benchmark – is known as Beta. Briefly, Beta is measured through a method that calculates the worth danger of a safety or portfolio towards a benchmark, which is usually the broader market as measured by the S&P 500 Index.
When inventory markets are rising, high-beta shares might outperform. With that in thoughts, we created a listing of S&P 500 shares with the very best beta values.
You’ll be able to obtain your free Excessive Beta shares checklist (together with related monetary metrics akin to dividend yields and price-to-earnings ratios) by clicking on the hyperlink under:
It’s useful in understanding the general value danger degree for traders throughout market downturns specifically.
Excessive Beta shares aren’t a positive guess throughout bull markets to outperform, so traders needs to be considered when including excessive Beta shares to a portfolio, as the burden of the proof suggests they’re extra prone to under-perform during times of market weak spot.
Nevertheless, for these traders all for including a bit extra danger to their portfolio, we’ve put collectively a listing to assist traders discover one of the best excessive beta shares.
This text will present an outline of Beta. As well as, we’ll focus on the best way to calculate Beta, incorporating Beta into the Capital Asset Pricing Mannequin, and supply evaluation on the highest 5 highest-Beta dividend shares in our protection database.
The desk of contents under gives for simple navigation:
Desk of Contents
Excessive Beta Shares Versus Low Beta
Right here’s the best way to learn inventory betas:
A beta of 1.0 means the inventory strikes equally with the S&P 500
A beta of two.0 means the inventory strikes twice as a lot because the S&P 500
A beta of 0.0 means the shares strikes don’t correlate with the S&P 500
A beta of -1.0 means the inventory strikes exactly reverse the S&P 500
The upper the Beta worth, the extra volatility the inventory or portfolio ought to exhibit towards the benchmark. This may be useful for these traders that want to take a bit extra danger available in the market as shares which might be extra risky – that’s, these with larger Beta values – ought to outperform the benchmark (in idea) throughout bull markets.
Nevertheless, Beta works each methods and may actually result in bigger draw-downs during times of market weak spot. Importantly, Beta merely measures the scale of the strikes a safety makes.
Intuitively, it will make sense that top Beta shares would outperform throughout bull markets. In spite of everything, these shares needs to be attaining greater than the benchmark’s returns given their excessive Beta values.
Whereas this may be true over quick intervals of time – notably the strongest components of the bull market – the excessive Beta names are typically the primary to be bought closely by traders.
One potential idea for this, is that traders are ready to make use of leverage to bid up momentum names with excessive Beta values and thus, on common, these shares have decrease potential returns at any given time.
As well as, leveraged positions are among the many first to be bought by traders throughout weak intervals due to margin necessities or different financing issues that come up throughout bear markets.
Whereas excessive Beta names might outperform whereas the market is robust, as indicators of weak spot start to indicate, excessive Beta names are the primary to be bought and customarily, far more strongly than the benchmark.
Certainly, proof suggests that in good years for the market, excessive Beta names seize 138% of the market’s whole returns.
In different phrases, if the market returned 10% in a 12 months, excessive Beta names would, on common, produce 13.8% returns. Nevertheless, throughout down years, excessive Beta names seize 243% of the market’s returns.
In an analogous instance, if the market misplaced 10% throughout a 12 months, the group of excessive Beta names would have returned -24.3%. Given this comparatively small outperformance throughout good occasions and huge underperformance throughout weak intervals, it’s simple to see why we want low Beta shares.
Associated: The S&P 500 Shares With Damaging Beta.
Whereas low Beta shares aren’t a vaccine towards downturns available in the market, it’s a lot simpler to make the case over the long term for low Beta shares versus excessive Beta given how every group performs throughout bull and bear markets.
How To Calculate Beta
The method to calculate a safety’s Beta is pretty easy. The consequence, expressed as a quantity, reveals the safety’s tendency to maneuver with the benchmark.
Due to this fact, a Beta worth of 1.00 implies that the safety in query ought to transfer just about in lockstep with the benchmark (as mentioned briefly within the introduction of this text).
A Beta of two.00 means strikes needs to be twice as massive in magnitude whereas a damaging Beta implies that returns within the safety and benchmark are negatively correlated; these securities have a tendency to maneuver in the other way from the benchmark.
This form of safety can be useful to mitigate broad market weak spot in a single’s portfolio as negatively correlated returns would counsel the safety in query would rise whereas the market falls.
For these traders looking for excessive Beta, shares with values in extra of 1.3 can be those to hunt out. These securities would provide traders at the very least 1.3X the market’s returns for any given interval.
Right here’s a have a look at the method to compute Beta:
The numerator is the covariance of the asset in query whereas the denominator is the variance of the market. These complicated-sounding variables aren’t truly that tough to compute.
Right here’s an instance of the info you’ll have to calculate Beta:
Danger-free price (usually Treasuries at the very least two years out)
Your asset’s price of return over some interval (usually one 12 months to 5 years)
Your benchmark’s price of return over the identical interval because the asset
To point out the best way to use these variables to do the calculation of Beta, we’ll assume a risk-free price of two%, our inventory’s price of return of 14% and the benchmark’s price of return of 8%.
You begin by subtracting the risk-free price of return from each the safety in query and the benchmark. On this case, our asset’s price of return internet of the risk-free price can be 12% (14% – 2%). The identical calculation for the benchmark would yield 6% (8% – 2%).
These two numbers – 12% and 6%, respectively – are the numerator and denominator for the Beta method. Twelve divided by six yields a worth of two.00, and that’s the Beta for this hypothetical safety.
On common, we’d count on an asset with this Beta worth to be 200% as risky because the benchmark.
Enthusiastic about it one other means, this asset needs to be about twice as risky because the benchmark whereas nonetheless having its anticipated returns correlated in the identical route.
That’s, returns can be correlated with the market’s general route, however would return double what the market did in the course of the interval.
This could be an instance of a really excessive Beta inventory and would provide a considerably larger danger profile than a mean or low Beta inventory.
Beta & The Capital Asset Pricing Mannequin
The Capital Asset Pricing Mannequin, or CAPM, is a typical investing method that makes use of the Beta calculation to account for the time worth of cash in addition to the risk-adjusted returns anticipated for a selected asset.
Beta is an integral part of the CAPM as a result of with out it, riskier securities would seem extra favorable to potential traders. Their danger wouldn’t be accounted for within the calculation.
The CAPM method is as follows:
The variables are outlined as:
ERi = Anticipated return of funding
Rf = Danger-free price
βi = Beta of the funding
ERm = Anticipated return of market
The chance-free price is identical as within the Beta method, whereas the Beta that you simply’ve already calculated is solely positioned into the CAPM method.
The anticipated return of the market (or benchmark) is positioned into the parentheses with the market danger premium, which can be from the Beta method. That is the anticipated benchmark’s return minus the risk-free price.
To proceed our instance, right here is how the CAPM truly works:
ER = 2% + 2.00(8% – 2%)
On this case, our safety has an anticipated return of 14% towards an anticipated benchmark return of 8%. In idea, this safety ought to vastly outperform the market to the upside however needless to say throughout downturns, the safety would endure considerably bigger losses than the benchmark.
If we modified the anticipated return of the market to -8% as a substitute of +8%, the identical equation yields anticipated returns for our hypothetical safety of -18%.
This safety would theoretically obtain stronger returns to the upside however actually a lot bigger losses on the draw back, highlighting the danger of excessive Beta names throughout something however robust bull markets.
Whereas the CAPM actually isn’t good, it’s comparatively simple to calculate and provides traders a method of comparability between two funding alternate options.
Evaluation On The 5 Highest-Beta Dividend Shares
Now, we’ll check out the 5 dividend shares with the very best Beta scores (in ascending order from lowest to highest) within the Positive Evaluation Analysis Database:
#5: Blackstone Group LP (BX)
Blackstone, based in 1985 by Peter Peterson and Stephen Schwarzman (nonetheless CEO), is likely one of the main funding corporations globally.
On the finish of March thirty first, 2025, the corporate held $1.17 trillion in property below administration (AUM), working in Non-public Fairness (32% of AUM), Actual Property (27%), Credit score (33%) and Hedge Fund Options (8%).
On April seventeenth, 2025, Blackstone posted its Q1 outcomes for the interval ending March thirty first, 2025. Administration and advisory charges equaled $1.90 billion, up 11% year-over-year.
Incentive charges grew by 7% to $191.8 million. Additional, efficiency allocations had been $825.3 million, down from $1.10 billion final 12 months. Thus, regardless of flat curiosity and dividend earnings at $97.4 million, whole revenues landed at $3.29 billion, down 11% year-over-year.
Distributable earnings in the course of the quarter equaled $1.41 billion or $1.09 per share, up 11% year-over-year. Whole property below administration equaled $1.17 trillion, up 10% year-over-year, pushed by $199.1 billion in inflows in the course of the previous 12 months.
BX has a Beta worth of 1.64.
Click on right here to obtain our most up-to-date Positive Evaluation report on BX (preview of web page 1 of three proven under):
#4: Lam Analysis (LRCX)
Lam Analysis Company (LRCX) was based in 1980 and headquartered in Fermont, California. The corporate designs, manufactures, markets, refurbishes, and providers semiconductor processing gear used to manufacture built-in circuits worldwide.
Lam is a serious provider of wafer fabrication gear and providers to the semiconductor trade. Its merchandise deal with varied purposes, together with skinny movie deposition, single-wafer cleansing, and plasma tech.
The corporate has a market capitalization of roughly $108.7 billion, over 10,700 workers, and produced roughly $14.9 billion in income in 2024.
On April twenty third, 2025, Lam Analysis reported the third quarter outcomes for Fiscal 12 months (FY)2025. Lam Analysis Company ends its fiscal 12 months on the finish of June. Lam Analysis Company reported robust monetary outcomes for the quarter ending March 30, 2025, with income of $4.72 billion, up 8% from $4.38 billion within the prior quarter.
U.S. GAAP gross margin rose to 49.0% (+160 bps), working earnings reached 33.1% of income (+260 bps), and diluted EPS elevated 12% to $1.03. Non-GAAP metrics confirmed a 49.0% gross margin, 32.8% working earnings, and diluted EPS of $1.04, up 14%.
LRCX has a Beta worth of 1.67.
Click on right here to obtain our most up-to-date Positive Evaluation report on LRCX (preview of web page 1 of three proven under):
#3: Utilized Supplies (AMAT)
Utilized Supplies is a serious participant within the semiconductor market, which makes up nearly all of its income.
Utilized Supplies posted second quarter earnings on Could fifteenth, 2025, and outcomes had been combined. Adjusted earnings-per share got here to $2.39, beating estimates by eight cents. Nevertheless, income missed estimates by $20 million at $7.1 billion, rising 6.8% year-over-year. The entire firm’s reporting segments posted development in income.
Gross margin was 49.2% of income on an adjusted foundation, 170 foundation factors larger year-on-year. This was additionally the corporate’s highest gross margin for the previous 25 years.
Semiconductor Techniques income was $5.26 billion, AGS income was $1.57 billion, and Show produced $259 million. Free money move was $1.1 billion for Q2, and Utilized Supplies ended with money and equivalents of $6.2 billion, and debt of $6.3 billion.
The dividend was boosted once more, this time to $1.84 per share yearly. Administration additionally added $10 billion to the corporate’s share repurchase authorization, leading to $15.9 billion obtainable for future repurchases.
AMAT has a Beta worth of 1.68.
Click on right here to obtain our most up-to-date Positive Evaluation report on AMAT (preview of web page 1 of three proven under):
#2: Nucor Corp. (NUE)
Nucor is the biggest publicly traded US-based metal company primarily based on its market capitalization. The metal trade is notoriously cyclical, which makes Nucor’s streak of 52 consecutive years of dividend will increase much more exceptional.
Nucor is a member of the Dividend Kings as a consequence of its dividend historical past.
On April 28, 2025, Nucor Company reported its monetary outcomes for the primary quarter of 2025. The corporate posted internet earnings attributable to stockholders of $156 million, or $0.67 per diluted share, a major lower from $845 million, or $3.46 per share, in the identical quarter of the earlier 12 months.
Adjusted internet earnings, excluding one-time costs associated to facility closures and repurposing, had been $179 million, or $0.77 per share, surpassing analyst expectations of $0.64 per share.
Web gross sales for the quarter had been $7.83 billion, down 4% year-over-year however up 11% sequentially, pushed by a ten% improve in whole shipments to six.83 million tons, regardless of a 12% decline in common gross sales value per ton in comparison with the primary quarter of 2024.
The metal mills phase contributed $231 million in pre-tax earnings, benefiting from larger volumes and improved pricing, whereas the metal merchandise phase generated $288 million, going through stress from decrease common promoting costs.
NUE has a Beta worth of 1.69.
Click on right here to obtain our most up-to-date Positive Evaluation report on NUE (preview of web page 1 of three proven under):
#1: KKR & Co. (KKR)
KKR & Co is a worldwide funding firm with property below administration (AUM) of $496 billion. KKR operates on 4 enterprise traces: Non-public markets, public markets, capital markets, and principal actions.
KKR manages non-public fairness funds that make investments capital for long-term appreciation by means of the Non-public Markets enterprise line.
KKR & Co launched Q1 2025 outcomes on Could 1st, 2025. In Q1, KKR reported fee-related earnings of $823 million, up 23% year-over-year, and whole working earnings of $1.1 billion, which was a 16% improve.
Adjusted internet earnings reached $1.0 billion, marking a 20% rise. Payment-related earnings grew 37% to $3.4 billion for the final twelve months, whereas whole working earnings climbed 32% to $4.5 billion.
Adjusted internet earnings totaled $4.4 billion, reflecting a 37% improve. KKR’s property below administration (AUM) rose 15% year-over-year to $664 billion, with fee-paying AUMs up 12% to $526 billion.
KKR has a Beta worth of 1.88.
Click on right here to obtain our most up-to-date Positive Evaluation report on KKR (preview of web page 1 of three proven under):
Remaining Ideas
Traders should take danger into consideration when choosing potential investments. In spite of everything, if two securities are in any other case related when it comes to anticipated returns however one affords a a lot decrease Beta, the investor would do effectively to pick out the low Beta safety as it will provide higher risk-adjusted returns.
Utilizing Beta might help traders decide which securities will produce extra volatility than the broader market, akin to those listed right here.
The 5 shares we’ve checked out provide traders excessive Beta scores together with very robust potential returns.
For traders who need to take some extra danger of their portfolio, these names and others like them in our checklist of the 100 greatest excessive Beta shares might help decide what to search for when choosing a excessive Beta inventory to purchase.
At Positive Dividend, we frequently advocate for investing in corporations with a excessive likelihood of accelerating their dividends every 12 months.
If that technique appeals to you, it could be helpful to flick thru the next databases of dividend development shares:
Thanks for studying this text. Please ship any suggestions, corrections, or inquiries to assist@suredividend.com.
