3 Low Risk Small-Caps With Strong Profitability

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 |  Includes: ALX, EPR, RSO
by: Kapitall

Do you worry about stock market volatility? For ideas on how to search for low volatility stocks, we ran a screen.

We began by screening the small-cap sector for low-volatility stocks, with average intra-day volatility over the last month under 2% (meaning, on average, these stocks have traded within a 2% range each day).

We then screened for those with strong profitability compared to industry peers, with higher gross, operating, and pretax margins than their industry averages by at least 5% on each margin. This indicates that these companies are taking a greater percentage of their revenues as profits, and they also have stronger control over their cost structures.

Do you think these stocks offer less risk? Use this list as a starting point for your own analysis.

List sorted by difference between pretax margin and industry average.

1. Resource Capital Corp. (NYSE:RSO): Operates as a specialty finance company that focuses primarily on commercial real estate and commercial finance in the United States. Market cap at $442.34M, most recent closing price at $5.32. Average intra-day volatility over the last month at 1.71%. TTM gross margin at 64.09% vs. industry average at 42.43%. TTM operating margin at 64.09% vs. industry average at 40.1%. TTM pretax margin at 39.33% vs. industry average at 22.41%.

2. Entertainment Properties Trust (NYSE:EPR): Develops, owns, leases, and finances entertainment and related properties in the United States and Canada. Market cap at $1.97B, most recent closing price at $42.55. Average intra-day volatility over the last month at 1.84%. TTM gross margin at 55.63% vs. industry average at 42.43%. TTM operating margin at 55.63% vs. industry average at 40.1%. TTM pretax margin at 32.68% vs. industry average at 22.41%.

3. Alexander's Inc. (NYSE:ALX): Engages in leasing, managing, developing, and redeveloping properties in the greater New York City metropolitan area. Market cap at $2.B, most recent closing price at $397.47. Average intra-day volatility over the last month at 1.27%. TTM gross margin at 51.42% vs. industry average at 42.43%. TTM operating margin at 51.42% vs. industry average at 40.1%. TTM pretax margin at 32.48% vs. industry average at 22.41%.

*Profitability data sourced from Fidelity, all other data sourced from Finviz.

Disclosure: I have no positions in any stocks mentioned, and no plans to initiate any positions within the next 72 hours.