Up to date on December twenty third, 2025 by Bob Ciura
On this 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 unstable than others expertise huge swings in worth.
Volatility is a proxy for danger; extra volatility typically means a riskier portfolio. The volatility of a safety or portfolio in opposition to a benchmark known as Beta.
In brief, Beta is measured through a method that calculates the worth danger of a safety or portfolio in opposition to a benchmark, which is usually the broader market as measured by the S&P 500.
Right here’s methods 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
Apparently, low beta shares have traditionally outperformed the market… However extra on that later.
You’ll be able to obtain a spreadsheet of the 100 lowest beta S&P shares (together with necessary monetary metrics like price-to-earnings ratios and dividend yields) beneath:
This text will focus on beta extra completely, why low-beta shares are likely to outperform, and supply a dialogue of the 5 lowest-beta dividend shares within the Positive Evaluation Analysis Database.
The desk of contents beneath permits for straightforward navigation.
Desk of Contents
The Proof for Low Beta Shares Outperformance
Beta is useful in understanding the general worth danger degree for buyers throughout market downturns particularly. The decrease the Beta worth, the much less volatility the inventory or portfolio ought to exhibit in opposition to the benchmark.
That is helpful for buyers for apparent causes, significantly these which might be near or already in retirement, as drawdowns needs to be comparatively restricted in opposition to the benchmark.
Importantly, low or excessive Beta merely measures the dimensions of the strikes a safety makes; it doesn’t imply essentially that the worth of the safety stays almost fixed.
Securities might be low Beta and nonetheless be caught in long-term downtrends, so that is merely yet one more instrument buyers can use when constructing a portfolio.
The traditional knowledge would recommend that decrease Beta shares ought to underperform the broader markets throughout uptrends and outperform throughout downtrends, providing buyers decrease potential returns in trade for decrease danger.
Nevertheless, historical past would recommend that merely isn’t the case.
Certainly, this paper from Harvard Enterprise Faculty means that not solely do low Beta shares not underperform the broader market over time – together with all market situations – they really outperform.
A protracted-term examine whereby the shares with the bottom 30% of Beta scores within the US have been pitted in opposition to shares with the very best 30% of Beta scores steered that low Beta shares outperform by a number of proportion factors yearly.
Over time, this kind of outperformance can imply the distinction between a cushty retirement and having to proceed working.
Whereas low Beta shares aren’t a panacea, the case for his or her outperformance over time – and with decrease danger – is sort of compelling.
How To Calculate Beta
The method to calculate a safety’s Beta is pretty easy. The end result, expressed as a quantity, reveals the safety’s tendency to maneuver with the benchmark.
For instance, a Beta worth of 1.0 signifies that the safety in query ought to transfer in lockstep with the benchmark. A Beta of two.0 signifies that strikes within the safety needs to be twice as massive in magnitude because the benchmark and in the identical course, whereas a damaging Beta signifies that actions within the safety and benchmark have a tendency to maneuver in reverse instructions or are negatively correlated.
Associated: The S&P 500 Inventory With Destructive Beta.
In different phrases, negatively correlated securities could be anticipated to rise when the general market falls, or vice versa. A small worth of Beta (one thing lower than 1.0) signifies a inventory that strikes in the identical course because the benchmark, however with smaller relative adjustments.
Right here’s a take a look at the method:
The numerator is the covariance of the asset in query with the market, whereas the denominator is the variance of the market. These complicated-sounding variables aren’t really that troublesome to compute – particularly in Excel.
Moreover, Beta may also be calculated because the correlation coefficient of the safety in query and the market, multiplied by the safety’s normal deviation divided by the market’s normal deviation.
Lastly, there’s a drastically simplified approach to calculate Beta by manipulating the capital asset pricing mannequin method (extra on Beta and the capital asset pricing mannequin later on this article).
Right here’s an instance of the information you’ll have to calculate Beta:
Danger-free charge (usually Treasuries no less than two years out)
Your asset’s charge of return over some interval (usually one yr to 5 years)
Your benchmark’s charge of return over the identical interval because the asset
To point out methods to use these variables to do the calculation of Beta, we’ll assume a risk-free charge of two%, our inventory’s charge of return of seven% and the benchmark’s charge of return of 8%.
You begin by subtracting the risk-free charge of return from each the safety in query and the benchmark. On this case, our asset’s charge of return internet of the risk-free charge could be 5% (7% – 2%).
The identical calculation for the benchmark would yield 6% (8% – 2%).
These two numbers – 5% and 6%, respectively – are the numerator and denominator for the Beta method. 5 divided by six yields a worth of 0.83, and that’s the Beta for this hypothetical safety.
On common, we’d count on an asset with this Beta worth to be 83% as unstable because the benchmark.
Fascinated with it one other method, this asset needs to be about 17% much less unstable than the benchmark whereas nonetheless having its anticipated returns correlated in the identical course.
Beta & The Capital Asset Pricing Mannequin (CAPM)
The Capital Asset Pricing Mannequin, or CAPM, is a standard 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 specific asset.
Beta is an integral part of the CAPM as a result of with out it, riskier securities would seem extra favorable to potential buyers. 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 charge
βi = Beta of the funding
ERm = Anticipated return of market
The chance-free charge is similar 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 also be from the Beta method. That is the anticipated benchmark’s return minus the risk-free charge.
To proceed our instance, right here is how the CAPM really works:
ER = 2% + 0.83(8% – 2%)
On this case, our safety has an anticipated return of 6.98% in opposition to an anticipated benchmark return of 8%. Which may be okay relying upon the investor’s objectives because the safety in query ought to expertise much less volatility than the market because of its Beta of lower than 1.
Whereas the CAPM definitely isn’t excellent, it’s comparatively simple to calculate and offers buyers a method of comparability between two funding options.
Now, we’ll check out 5 shares that not solely supply buyers low Beta scores, however enticing potential returns as effectively.
Evaluation On The High 5 Low Beta Shares
The next 5 low beta shares have the bottom (however constructive) Beta values, in ascending order from lowest to highest. In addition they pay dividends to shareholders.
We centered on Betas above 0, as we’re nonetheless in search of shares which might be positively correlated with the broader market:
5. Allstate Company (ALL)
Allstate Company is an insurance coverage firm that provides property and casualty insurance coverage to its prospects. The corporate additionally sells life, accident, and medical health insurance merchandise.
Its segments embrace Allstate Safety, Service Companies, Allstate Life, Allstate Advantages, Allstate Annuities, and many others. Allstate’s insurance coverage manufacturers embrace Allstate, Embody, and Esurance.
Allstate Company reported third quarter 2025 outcomes on November fifth, 2025. The corporate reported consolidated revenues of $17.3 billion for the quarter, a 3.8% year-over-year enhance, largely on account of greater Property-Legal responsibility earned premium.
Property-Legal responsibility insurance coverage premiums earned totaled $14.5 billion, up 6.1% from $13.7 billion in the identical interval a yr in the past. Adjusted internet revenue per share of $11.17 soared from $3.91 a yr in the past.
The insurance coverage business just isn’t a high-growth business, nonetheless, Allstate has managed to develop earnings efficiently over the long run, with ebbs and flows over sure time durations.
The corporate advantages from rising rates of interest, as this permits it to deploy its insurance coverage float extra profitably.
Allstate has efficiently diminished its share rely all through the final decade, and it’s probably that share repurchases will stay a key consider earnings-per-share progress going ahead as effectively.
Within the final 5 years, the corporate has diminished its frequent shares excellent by 4.1% yearly.
Click on right here to obtain our most up-to-date Positive Evaluation report on ALL (preview of web page 1 of three proven beneath):
4. JM Smucker (SJM)
J.M. Smucker has grown into a world powerhouse of packaged meals and beverage merchandise together with iconic names like Smucker’s, Jif and Folgers, together with numerous pet meals manufacturers.
In late November, Smucker’s reported (11/25/25) monetary outcomes for the second quarter of fiscal 2026. Forex-neutral, natural gross sales grew 5% over the prior yr’s quarter, because of robust demand for the main manufacturers of the corporate.
Adjusted earnings-per-share decreased -24%, from $2.76 to $2.10, according to the analysts’ estimates, on account of greater commodity prices and tariffs. Smucker’s has missed the analysts’ consensus solely as soon as within the final 25 quarters.
Administration narrowed the weak steerage it has offered for fiscal 2026 amid the influence of tariffs and an unfavorable general financial panorama. It expects 3.5%-4.5% progress of gross sales and adjusted earnings-per-share of $8.75-$9.25.
Click on right here to obtain our most up-to-date Positive Evaluation report on SJM (preview of web page 1 of three proven beneath):
3. The Hershey Firm (HSY)
The Hershey Firm, based in 1894, is a chocolate and sugar confectionary merchandise producer that sells main manufacturers reminiscent of Hershey’s, Reese’s, Kisses, Cadbury, Ice Breakers, Equipment Kat, Almond Pleasure, Jolly Rancher, Twizzlers, Heath, and Milk Duds. Hershey primarily operates in North America however has worldwide operations as effectively.
On October thirtieth, 2025, Hershey reported outcomes for the third quarter of 2025. The North America Confectionary section (82% of gross sales) grew its gross sales 6% over final yr’s quarter thanks to cost hikes.
Earnings-per-share decreased 44%, from $2.32 to $1.30, however exceeded the analysts’ consensus by $0.24, primarily because of an efficient hedging technique, which partly offset the impact of exceptionally excessive cocoa costs.
Hershey is going through a particularly robust headwind from sky-high cocoa costs, which squeeze the revenue margins of the chocolate maker. Hershey marginally raised its weak steerage for 2025, anticipating a ~36.5% decline in earnings-per-share.
Click on right here to obtain our most up-to-date Positive Evaluation report on HSY (preview of web page 1 of three proven beneath):
2. The Kraft-Heinz Firm (KHC)
Kraft-Heinz is a processed meals and drinks firm which owns a product portfolio that features meals merchandise reminiscent of condiments, sauces, cheese & dairy, frozen & chilled meals, and toddler weight loss plan & diet.
When The Kraft-Heinz Firm introduced its third quarter earnings outcomes, the corporate reported that its revenues totaled $6.2 billion through the quarter, which was down 2.2% in comparison with the revenues that Kraft-Heinz generated through the earlier yr’s interval.
This was barely worse than what the analyst neighborhood had anticipated, because the consensus estimate was missed by $20 million. Kraft-Heinz’ natural gross sales have been down by 2.5%.
Kraft-Heinz generated earnings-per-share of $0.61 through the third quarter, which was above the consensus estimate. Earnings-per-share have been down 19% versus the earlier yr’s quarter.
Kraft-Heinz’ administration said that they see natural internet gross sales declining by 3% to three.5% in 2025, whereas administration is forecasting earnings-per-share to come back in between $2.50 and $2.57 for the present yr. This might imply a decline of round 17% versus the earlier yr.
Click on right here to obtain our most up-to-date Positive Evaluation report on KHC (preview of web page 1 of three proven beneath):
1. Northrop Grumman (NOC)
Northrop Grumman Company is without doubt one of the 5 largest U.S. aerospace and protection contractors primarily based on income.
The corporate stories 4 enterprise segments: Aeronautics Methods (plane and UAVs), Mission Methods (radars, sensors and methods for surveillance and concentrating on), Protection Methods (sustainment and modernization, directed power, tactical weapons), and House Methods (missile protection, area methods, hypersonics and area launchers).
Northrop Grumman makes the B-2 Spirit, E-2D, E-8C, RQ-4 International Hawk, MQ-4C Triton, MQ-8B/C Hearth Scout, and B-21. The corporate additionally gives content material on the F-35 and F/A-18. It received the contract for the GPI. The corporate had income of over $41.0B in 2024.
Northrop Grumman reported outcomes for Q3 FY 2025 on October twenty first, 2025. Firm-wide income rose 4% and diluted earnings per share rose 10% to $7.67 from $7.00 on a year-over-year foundation on greater gross sales in three of the 4 segments and better working margins.
Income for Aeronautics Methods rose 6% on account of greater volumes on the F-35, E-130J, however offset by the F/A-18 program. Income for Protection Methods grew 14% in comparable quarters on account of greater gross sales within the Sentinel, IBCS, armament, and ammunition applications.
Income for Mission Methods elevated 10% within the quarter on account of greater volumes on restricted superior microelectronic, ground-based radar, and marine methods applications. The corporate adjusted steerage to $41.7B to $41.9B in gross sales and $25.65 to $26.05 earnings per share in 2025.
Click on right here to obtain our most up-to-date Positive Evaluation report on NOC (preview of web page 1 of three proven beneath):
Closing Ideas
Traders should take danger into consideration when deciding on from potential investments. In any case, if two securities are in any other case comparable when it comes to anticipated returns however one gives a a lot decrease Beta, the investor would do effectively to pick out the low Beta safety as they might supply higher risk-adjusted returns.
Utilizing Beta may help buyers decide which securities will produce extra volatility than the broader market and which of them could assist diversify a portfolio, reminiscent of those listed right here.
The 5 shares we’ve checked out not solely supply low Beta scores, however additionally they supply enticing dividend yields. Sifting by way of the immense variety of shares accessible for buy to buyers utilizing standards like these may help buyers discover the perfect shares to swimsuit their wants.
At Positive Dividend, we regularly advocate for investing in corporations with a excessive chance of accelerating their dividends each yr.
If that technique appeals to you, it could be helpful to flick thru the next databases of dividend progress shares:
The Dividend Aristocrats Record: dividend shares with 25+ years of consecutive dividend will increase
The Dividend Achievers Record is comprised of ~400 shares with 10+ years of consecutive dividend will increase.
The Dividend Kings Record is much more unique than the Dividend Aristocrats. It’s comprised of 56 shares with 50+ years of consecutive dividend will increase.
The Excessive Yield Dividend Kings Record is comprised of the 20 Dividend Kings with the very best present yields.
The Blue Chip Shares Record: shares that qualify as Dividend Achievers, Dividend Aristocrats, and/or Dividend Kings
The Excessive Dividend Shares Record: shares that attraction to buyers within the highest yields of 5% or extra.
The Month-to-month Dividend Shares Record: shares that pay dividends each month, for 12 dividend funds per yr.
The Dividend Champions Record: shares which have elevated their dividends for 25+ consecutive years.Be aware: Not all Dividend Champions are Dividend Aristocrats as a result of Dividend Aristocrats have extra necessities like being in The S&P 500.
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