Updated on October 17th, 2025 by Bob Ciura
In the world of investing, volatility matters. Investors are reminded of this every time there is a downturn in the broader market and individual stocks that are more volatile than others experience enormous swings in price.
Volatility is a proxy for risk; more volatility generally means a riskier portfolio. The volatility of a security or portfolio against a benchmark is called Beta.
In short, Beta is measured via a formula that calculates the price risk of a security or portfolio against a benchmark, which is typically the broader market as measured by the S&P 500.
Here’s how to read stock betas:
A beta of 1.0 means the stock moves equally with the S&P 500
A beta of 2.0 means the stock moves twice as much as the S&P 500
A beta of 0.0 means the stocks moves don’t correlate with the S&P 500
A beta of -1.0 means the stock moves precisely opposite the S&P 500
Interestingly, low beta stocks have historically outperformed the market… But more on that later.
You can download a spreadsheet of the 100 lowest beta S&P stocks (along with important financial metrics like price-to-earnings ratios and dividend yields) below:
This article will discuss beta more thoroughly, why low-beta stocks tend to outperform, and provide a discussion of the 5 lowest-beta dividend stocks in the Sure Analysis Research Database.
The table of contents below allows for easy navigation.
Table of Contents
The Evidence for Low Beta Stocks Outperformance
Beta is helpful in understanding the overall price risk level for investors during market downturns in particular. The lower the Beta value, the less volatility the stock or portfolio should exhibit against the benchmark.
This is beneficial for investors for obvious reasons, particularly those that are close to or already in retirement, as drawdowns should be relatively limited against the benchmark.
Importantly, low or high Beta simply measures the size of the moves a security makes; it does not mean necessarily that the price of the security stays nearly constant.
Securities can be low Beta and still be caught in long-term downtrends, so this is simply one more tool investors can use when building a portfolio.
The conventional wisdom would suggest that lower Beta stocks should underperform the broader markets during uptrends and outperform during downtrends, offering investors lower prospective returns in exchange for lower risk.
However, history would suggest that simply isn’t the case.
Indeed, this paper from Harvard Business School suggests that not only do low Beta stocks not underperform the broader market over time – including all market conditions – they actually outperform.
A long-term study wherein the stocks with the lowest 30% of Beta scores in the US were pitted against stocks with the highest 30% of Beta scores suggested that low Beta stocks outperform by several percentage points annually.
Over time, this sort of outperformance can mean the difference between a comfortable retirement and having to continue working.
While low Beta stocks aren’t a panacea, the case for their outperformance over time – and with lower risk – is quite compelling.
How To Calculate Beta
The formula to calculate a security’s Beta is fairly straightforward. The result, expressed as a number, shows the security’s tendency to move with the benchmark.
For example, a Beta value of 1.0 means that the security in question should move in lockstep with the benchmark. A Beta of 2.0 means that moves in the security should be twice as large in magnitude as the benchmark and in the same direction, while a negative Beta means that movements in the security and benchmark tend to move in opposite directions or are negatively correlated.
Related: The S&P 500 Stock With Negative Beta.
In other words, negatively correlated securities would be expected to rise when the overall market falls, or vice versa. A small value of Beta (something less than 1.0) indicates a stock that moves in the same direction as the benchmark, but with smaller relative changes.
Here’s a look at the formula:
The numerator is the covariance of the asset in question with the market, while the denominator is the variance of the market. These complicated-sounding variables aren’t actually that difficult to compute – especially in Excel.
Additionally, Beta can also be calculated as the correlation coefficient of the security in question and the market, multiplied by the security’s standard deviation divided by the market’s standard deviation.
Finally, there’s a greatly simplified way to calculate Beta by manipulating the capital asset pricing model formula (more on Beta and the capital asset pricing model later in this article).
Here’s an example of the data you’ll need to calculate Beta:
Risk-free rate (typically Treasuries at least two years out)
Your asset’s rate of return over some period (typically one year to five years)
Your benchmark’s rate of return over the same period as the asset
To show how to use these variables to do the calculation of Beta, we’ll assume a risk-free rate of 2%, our stock’s rate of return of 7% and the benchmark’s rate of return of 8%.
You start by subtracting the risk-free rate of return from both the security in question and the benchmark. In this case, our asset’s rate of return net of the risk-free rate would be 5% (7% – 2%).
The same calculation for the benchmark would yield 6% (8% – 2%).
These two numbers – 5% and 6%, respectively – are the numerator and denominator for the Beta formula. Five divided by six yields a value of 0.83, and that is the Beta for this hypothetical security.
On average, we’d expect an asset with this Beta value to be 83% as volatile as the benchmark.
Thinking about it another way, this asset should be about 17% less volatile than the benchmark while still having its expected returns correlated in the same direction.
Beta & The Capital Asset Pricing Model (CAPM)
The Capital Asset Pricing Model, or CAPM, is a common investing formula that utilizes the Beta calculation to account for the time value of money as well as the risk-adjusted returns expected for a particular asset.
Beta is an essential component of the CAPM because without it, riskier securities would appear more favorable to prospective investors. Their risk wouldn’t be accounted for in the calculation.
The CAPM formula is as follows:
The variables are defined as:
ERi = Expected return of investment
Rf = Risk-free rate
βi = Beta of the investment
ERm = Expected return of market
The risk-free rate is the same as in the Beta formula, while the Beta that you’ve already calculated is simply placed into the CAPM formula. The expected return of the market (or benchmark) is placed into the parentheses with the market risk premium, which is also from the Beta formula. This is the expected benchmark’s return minus the risk-free rate.
To continue our example, here is how the CAPM actually works:
ER = 2% + 0.83(8% – 2%)
In this case, our security has an expected return of 6.98% against an expected benchmark return of 8%. That may be okay depending upon the investor’s goals as the security in question should experience less volatility than the market thanks to its Beta of less than 1.
While the CAPM certainly isn’t perfect, it is relatively easy to calculate and gives investors a means of comparison between two investment alternatives.
Now, we’ll take a look at five stocks that not only offer investors low Beta scores, but attractive prospective returns as well.
Analysis On The Top 5 Low Beta Stocks
The following 5 low beta stocks have the lowest (but positive) Beta values, in ascending order from lowest to highest. They also pay dividends to shareholders.
We focused on Betas above 0, as we are still looking for stocks that are positively correlated with the broader market:
5. CME Group (GME)
CME Group is a Chicago-based company that operates futures and derivatives exchanges based on interest rates, equities, currencies, and commodities. CME Group has pursued industry consolidation through mergers (CBOT Holdings) and acquisitions (Nymex Holdings).
On July 23, 2025, CME Group Inc. reported its financial results for the second quarter of 2025. CME Group Inc. reported all-time record revenue of $1.7 billion for Q2 2025, up 10% from Q2 2024.
Operating income reached $1.1 billion, an increase of 12%, while net income was $1.0 billion, and adjusted net income hit a record $1.1 billion, with adjusted earnings per share at $2.96, up 12%.
Average daily volume (ADV) grew 7% to 26.8 million contracts, with non-U.S. ADV up 13% and interest rate ADV rising 9% to 14.0 million contracts.
Clearing and transaction fees increased 12% to $1.4 billion, and market data revenue grew 6% to $180 million. The company returned $1.4 billion to shareholders via dividends.
Click here to download our most recent Sure Analysis report on CME (preview of page 1 of 3 shown below):
4. Southern Co. (SO)
Southern Company is a major energy utility that serves ~9 million customers in the U.S. via its subsidiaries.
In late July, Southern reported (7/31/25) results for Q2-2025. Revenue grew 8% over last year’s quarter but earnings-per-share decreased -16%, from $1.10 to $0.92, as higher usage and customer growth was offset by milder weather and higher operating costs.
Southern has finally started up its Vogtle Units 3 and 4, the first new nuclear facilities built in the U.S. in a generation. This project faced so many setbacks that it became 8 years late, with a cost more than double the initial cost estimate.
Southern has missed analysts’ estimates in only 3 of the last 34 quarters. Management reiterated its positive guidance for 2025, expecting earnings-per-share of $4.20-$4.30.
Click here to download our most recent Sure Analysis report on SO (preview of page 1 of 3 shown below):
3. Kellanova (K)
Kellanova was founded in 1906, the beginning of what would become a behemoth in the food processing industry.
Kellanova has always focused on breakfast, but in recent years the company has also expanded to become an enormous snack producer. The company now derives more than half of its total revenue from non-breakfast categories. It produces about $13 billion in annual revenue.
Kellanova posted second quarter earnings on July 31st, 2025, and results were mixed. Adjusted earnings-per-share came to 94 cents, which was a nickel short of estimates. Revenue was up fractionally year-over-year to $3.2 billion, and beat estimates by $10 million.
Volume growth in noodles in Africa was offset by softness elsewhere, as well as shifts in mix. Growth was the same on both a headline and organic basis, as there were no acquisitions or divestitures, and currency translation was flat.
Operating profit was off 6% on an organic basis. Including forex and one-time charges, operating profit was down 11%. Net cash from operating activities was $285 million, representing a decline from the year-ago period.
Click here to download our most recent Sure Analysis report on K (preview of page 1 of 3 shown below):
2. UnitedHealth Group (UNH)
UnitedHealth dates back to 1974 when Charter Med was founded by a group of health care professionals looking for ways to expand healthcare options for consumers. It produces about $445 billion in revenue annually.
The company has two major reporting segments: UnitedHealth and Optum. The former provides global healthcare benefits to individuals, employers, and Medicare/Medicaid beneficiaries.
The Optum segment is a services business that seeks to lower healthcare costs and optimize outcomes for its customers.
UnitedHealth posted second quarter earnings on July 29th, 2025, and results were much worse than expected, including a massive guidance cut for the balance of the year. Adjusted earnings-per-share for Q2 came to $4.08, which was 37 cents light of estimates. Revenue was up 13% year-over-year, meeting estimates at $112 billion. Both of the companies primary operating segments posted growth once again.
The company’s consolidated medical care ratio was 89.4%, 430 basis points worse than last year’s Q2. The increase was due to medical cost trends “significantly” exceeding pricing trends. That includes both unit costs and the intensity of services delivered, along with the ongoing effects of Medicare funding reductions.
Days claims payable of 44.5 was down from 45.5 in the first quarter, and fractionally higher from the year-ago period. Operating costs were 12.3%, better than the 13.3% a year ago.
Full-year operating cost ratio is expected to be 12.75%, plus or minus 0.25%. Guidance for this year was cut to $445 billion in revenue, down about 1%. Earnings were slashed from ~$21 in adjusted earnings-per-share to just $16.
Click here to download our most recent Sure Analysis report on UNH (preview of page 1 of 3 shown below):
1. Conagra Foods (CAG)
Conagra traces its roots back to Gilbert Van Camp’s new canned product – pork and beans – in 1861.
The company was incorporated as Nebraska Consolidated Mills in 1919, changed to ConAgra in 1971, ConAgra Foods in 1993, and has now become Conagra Brands, moving its headquarters from Omaha to Chicago and spinning off its Lamb Weston business in 2016. In 2018 Conagra acquired Pinnacle Foods.
The company has well-known brands like Slim Jim, Healthy Choice, Marie Callender’s, Orville Redenbacher’s, Reddi Whip, Birds Eye, Vlasic, Hunt’s, and PAM.
After paying the same $0.2125 quarterly payout for 13 consecutive quarters, Conagra increased its dividend 29.4% in 2020, 13.6% in 2021, 5.6% in 2022, and 6.1% in 2023 to $0.35 per quarter.
On July 10th, 2025, Conagra reported fourth quarter results for the period ending May 25, 2025. (Conagra’s fiscal year ends the last Sunday in May). For the quarter, net sales declined 4.3% year-over-year to $2.8 billion, the result of a 3.5% reduction in organic net sales, a 0.6% decline due to currency exchange, and a negative impact of -0.2% due to M&A.
Volume declined 2.5%. Adjusted EPS decreased 8% to $0.56, missing analyst estimates by $0.05. At fiscal year-end, the company had net debt of $8.0 billion, and a net leverage ratio of 3.6x.
Conagra provided its fiscal 2026 guidance, expecting organic net sales growth of (1)% to 1% compared to FY 2025. Adjusted operating margin is likely to come in between 11.0% to 11.5%, and adjusted EPS is expected to decline sharply from FY 2025 to $1.70 to $1.85.
Capex is expected to be $450 million, and interest expense is expected to equal $400 million. Furthermore, it expects its net leverage ratio to degrade further to 3.85x.
Click here to download our most recent Sure Analysis report on CAG (preview of page 1 of 3 shown below):
Final Thoughts
Investors must take risk into account when selecting from prospective investments. After all, if two securities are otherwise similar in terms of expected returns but one offers a much lower Beta, the investor would do well to select the low Beta security as they may offer better risk-adjusted returns.
Using Beta can help investors determine which securities will produce more volatility than the broader market and which ones may help diversify a portfolio, such as the ones listed here.
The five stocks we’ve looked at not only offer low Beta scores, but they also offer attractive dividend yields. Sifting through the immense number of stocks available for purchase to investors using criteria like these can help investors find the best stocks to suit their needs.
At Sure Dividend, we often advocate for investing in companies with a high probability of increasing their dividends each and every year.
If that strategy appeals to you, it may be useful to browse through the following databases of dividend growth stocks:
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