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The 8 Best High Beta Stocks For Traders That Crave Volatility

Noah Zelvis - November 18, 2021

High Beta Stocks

You likely already know that risk is an important consideration when making any investment. While it can be difficult to measure or quantify a stock’s risk, the beta score is one mechanism. The best high beta stocks see a lot of volatility relative to the movement of the rest of the stock market.

The S&P 500, a market-capitalization-weighted index of the 500 largest U.S. publically traded companies, is typically used as the benchmark by which any stock’s beta is calculated.

Since the companies on the list are so large, they’re typically considered very low risk.

Therefore, the S&P 500 index is given a beta of 1.0.

Individual stocks have a beta score ranking in relation to how much they deviate from the general movement of the market.

Any stock that swings more than the market (indicating it’s more volatile) will have a score above 1.0.

Further, any stock that moves less than the overall market (indicating it’s less volatile) will have a beta score below 1.0.

Since volatility essentially translates to higher risk, this means there is a higher chance of making losses on your investment.

However, as you probably well know, higher risk also means the potential for higher reward.

We’ve put together a list of some of the best beta stocks on the market for investors looking for hefty returns.

Best High Beta Stocks

  • United Rentals, Inc. (NYSE: URI)
  • SVB Financial Group (NASDAQ: SIVB)

United Rentals, Inc. (NYSE: URI)

As the world’s largest equipment rental company, United Rentals has 13% of the North American market share.

The company operates across 49 U.S. states, 10 Canadian provinces, 4 European countries, and Puerto Rico.

Its primary focus is construction and industrial equipment such as trucks, forklifts, compressors.

The rental giant currently has a fleet of more than 660,000 rental units.

United Rentals works mainly with general and aerial rentals and offers power & HVAC units, tool solutions, fluid solutions, and more.

The company boasts a current market capitalization of $27.9 billion and comes in with a beta value of 1.94.

This means that United Rentals is approximately twice as volatile as the general market.

Despite volatility, the company has fared well since the downturn of 2020 and has increased its share price by over 300% in the last year.

The future looks solid for investors with holdings in United Rentals, considering there’s no disruptive tech or competitor in this space.

SVB Financial Group

SVB Financial Group (NASDAQ: SIVB)

Headquartered in California, SVB Financial Group has several well-known subsidiaries, including Silicon Valley Bank.

This bank has helped fund over 30,000 startups and is one of the largest banks in the United States.

Interestingly enough, the bank is also one of the largest financial service providers to Napa Valley wine producers.

SVB Financial offers asset management, brokerage and investment services, fund management services, and more between its many subsidiaries.

With a market cap of $43.8 billion and a beta value of 1.94, SVB has some nice volatility.

The firm has really found its stride in 2021, sitting at an all-time high of $745 per share, and is showing no sign of stopping.

Investors may want to watch and wait for a drop in price before investing, but SVB Financial Group will continue to fund some of the world’s largest tech companies and most exciting startups in Silicon Valley. 

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High Beta Tech Stocks

  • Microchip Technology Incorporated (NASDAQ: MCHP)
  • Devon Energy Corporation (NYSE: DVN)

Microchip Technology Incorporated (NASDAQ: MCHP)

Microchip Technology Incorporated is helping lead the charge in the microchip space with an assortment of products and solutions.

The company currently serves more than 120,000 customers across several different industry sectors.

With microchips in short supply around the world, Microchip is making a name for itself through high quality and dependability.

Furthermore, Microchip doesn’t simply provide a product but works with each client to understand precisely how they wish to implement microchip technology.

MCHP’s stock has witnessed firsthand some of the volatility that comes with a beta store of 1.57 but still sits over 30% higher than last year.

Financial reports from the third quarter are very strong, along with a market cap of nearly $46 billion.

As you ride out the waves, you’ll also receive from Microchip’s 1.12% dividend yield.

Microchip looks to be a great high beta stock and has the potential to be a solid long-term pick.

Devon Energy Corporation (NYSE: DVN)

Devon Energy Corporation is an energy producer with a focus on oil and gas.

The company has been in business since 1971 and focuses its attention onshore in the eastern United States.

Devon generates close to 300,000 barrels of natural gas and 125,000 barrels of liquid natural gas in one quarter through multiple basins.

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merger with WPX at the beginning of 2021 gives Devon even more capability to locate resources.

It is on the S&P 500 list with a market cap of nearly $29.6 billion.

Since the tail end of 2020, Devon has seen a steady rise in share price from $9 to $43.

The company even pays out a dividend of 1.01% to shareholders.

Furthermore, Devon Energy’s beta score is a very high 3.12 at present.

High Beta Mining Stocks

  • Marathon Oil Corporation (NYSE: MRO)

Marathon Oil Corporation (NYSE: MRO)

Marathon Oil is an American enterprise that mines black gold in several locations around the United States.

The company seeks to maintain a secure source of energy for the United States while also providing services to the world.

This operation is complemented by a gas business located in Equatorial Guinea.

With a desire to be sustainable, Marathon prioritizes social, environmental, and governance endeavors.

Marathon has been able to keep strong financials throughout 2021, seeing positive numbers nearly across the board.

Share prices have increased accordingly, growing 183% over the last year.

The energy company has a market cap of $12.5 billion and is quite volatile with a beta score of 3.08.

If all that wasn’t impressive enough, Marathon also provides a 1.49% dividend yield to stockholders.

High Beta Retail Stocks

  • Bath and Body Works (NYSE: BBWI)
  • YETI Holdings, Inc. (NYSE: YETI)

Bath and Body Works (NYSE: BBWI)

In August, the company formerly known as L Brands split into two separate entities with two unique stock tickers.

Bath & Body Works and Victoria’s Secret now stand apart from each other and no longer fall under the same umbrella.

Even before the separation, Bath and Body Works has shown itself to be a strong stock.

A steady climb in share price puts Bath and Body Works stock 145% higher than it was last year at this point.

It has a market cap of $20.7 billion and is trading above where L Brands left off at nearly $69 per share.

The company has a beta index score of 1.74, marking it as relatively volatile compared to the rest of the overall market.

With eCommerce becoming an increasingly important aspect of our lives, Bath and Body Works will likely continue to perform well.

Current conditions suggest investors are enthusiastic about the changes the company has made with the brand split.

Share prices are currently at their highest point in six years and have just reached the ticker’s all-time high.

YETI Holdings, Inc. (NYSE: YETI)

YETI Holdings, Inc. is based in Austin, Texas, and sells products like coolers and insulated drinkware.

The company got its start in 2006 after two brothers decided the current insulated products on the market just weren’t up to snuff.

Although starting with coolers, YETI has recently branched out into other insulated accessories to appeal to a broader range of people.

A relatively new company, YETI’s market cap is listed at $9.1 billion and has been trending upwards until just recently.

It sits at over $100 per share at the moment, and new innovations will likely see it continue to increase.

The beta value of 2.62 demonstrates a large amount of volatility.

Favorable financials for the fourth quarter in a row show that YETI has no plan to slow down any time soon.

High Beta Automotive Stocks

  • Commercial Vehicle Group, Inc. (NASDAQ: CVGI)

Commercial Vehicle Group, Inc. (NASDAQ: CVGI)

Commercial Vehicle Group is a supplier to not only the automotive industry but also to vehicles in agriculture, mining, industrial, warehousing, and more.

The company makes mechanical assemblies, structures, wire harnesses, and other components that these vehicles need to operate.

With electric cars on the rise, Commercial Vehicle Group is expanding operations to cover this industry as well.

The supplier’s plastics brand, AdvancTEK, was recently created to offer more products to an even wider range of customers.

Commercial Vehicle Group consistently sees gains in revenue, net income, and earnings per share even though it missed its ambitious goals for the third quarter.

It has a current market cap of $303 million and a beta score of 3.53.

Share prices are certainly seeing the volatility that comes with a high beta but are still nearly 30% higher than last year.

Investors agree that this ticker is undervalued and should be a great addition to any portfolio.

Should You Buy High Beta Stocks?

High beta stocks certainly can be a good investment option for traders who like to remain active.

They come with high risks, but they also have a huge potential for reward.

Not all high beta stocks are created equal, so it’s essential to research before making any investment decisions. 

The higher a stock gets from a beta score of 1.0, the more volatile the stock becomes.

Volatility often comes with huge returns, but it can also set you up for huge losses.

These tickers require a careful eye and keen judgment on when to buy and when to sell.

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Where to Buy High Beta Stocks

To best control volatility, it’s best to pick up high beta stocks from major exchanges that trade at higher volumes.

Stocks on OTC markets can be that much harder to predict, and there’s often less information available on a company.

Robinhood and Webull are well-known platforms for trading on exchanges like NASDAQ and the NYSE.

Both platforms offer commission-free trading and free stocks simply for signing up.

Robinhood touts an easy-to-understand user interface designed for traders at any level of the game.

Webull has more trading tools for investors to use when hunting for that next breakout stock.

High Beta Stocks: Final Thoughts

High beta stocks have huge potential, but they also come with plenty of risk.

Some industries are inherently volatile, which reflects in the stock market performance of these companies.

It’s also common for stocks to experience volatility if they’ve struggled with public controversies or have had multiple acquisitions in a short period of time. 

It can be challenging to figure out exactly why a stock is volatile.

However, these stocks can be great for investors with a high risk tolerance, as they come with massive potential for returns. 

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Noah is an American copywriter on a mission to help clarify the nuances of the financial world. When he's not working, you’ll likely find him running or traveling.