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Is Boston Scientific Corporation (BSX) the Best Low Volatility Stock to Buy Now?

Albert FoxSaturday, Apr 19, 2025 7:57 pm ET

58min read

Boston Scientific Corporation (BSX), a leader in medical device innovation, has long been a staple in healthcare investing. As markets grapple with macroeconomic uncertainty and sector-specific headwinds, investors are increasingly seeking stability. But is BSX the best low volatility stock to buy now? Let’s dissect its risk profile, peer comparisons, and valuation to find out.

Volatility Metrics: A Mid-Range Player in a Volatile Sector

Boston Scientific’s volatility metrics place it squarely in the middle of its sector. As of late 2024, its annualized historical volatility was 14.37%, calculated using monthly returns over the prior year. This figure aligns with the broader medical devices industry, which faces challenges like regulatory complexity and supply chain disruptions.

While its volatility is moderate, BSX’s levered beta of 0.992—derived from a discounted cash flow (DCF) analysis—suggests its stock price moves nearly in lockstep with the market. A beta below 1 implies lower sensitivity to market swings, but at 0.99, it’s barely distinguishable from the broader index. For comparison, the iShares U.S. Medical Devices ETF (FDX), which tracks sector peers, had a beta of 0.85 in Q1 2025, indicating it’s 15% less volatile than the market.

Peer Comparison: Outperforming but Priced Higher

BSX’s beta sits between peers like Abbott Laboratories (ABT), which reported a beta of 0.80 in Q1 2025, and Medtronic (MDT), whose beta remains undisclosed. Abbott’s lower beta suggests it’s a better low-volatility play, but BSX has outperformed Abbott and Medtronic in stock price growth over the past year.

Valuation tells another story. BSX’s forward P/E ratio of 32.19 is nearly double Medtronic’s 14.22x and 57% higher than Abbott’s 20.45x. This premium reflects investor optimism about BSX’s growth in international markets and its pipeline of cardiovascular and neuromodulation therapies. However, the high valuation raises questions about overexposure to sector-specific risks, such as regulatory delays or pricing pressures in global healthcare systems.

Sector Risks: A Volatile Landscape

The medical devices sector itself is far from stable. The iShares U.S. Medical Devices ETF (FDX), with a beta of 0.85, saw its YTD return dip to +3.50% by April 2025, while the SPDR S&P Health Care Equipment ETF (XHE) posted a -0.90% YTD return. These fluctuations stem from:- Economic uncertainty: 46% of large medical firms delayed hiring due to macroeconomic concerns.- Regulatory hurdles: Compliance costs for evolving standards like the EU MDR strain smaller competitors.- Quality management challenges: Postmarket surveillance costs for commercialized firms are three times higher than for pre-commercial peers.

The Case for BSX: A Balanced Risk-Return Profile

While Abbott offers lower volatility, BSX’s growth trajectory and diversification across markets (e.g., strong international momentum) give it an edge. Its Q1 2025 earnings expectations, driven by all-business-unit growth, suggest resilience amid sector headwinds. The NASDAQ Biotechnology Index, which indirectly influences medical device valuations, remains under pressure, but BSX’s focus on proven therapies (e.g., coronary stents) reduces its exposure to speculative biotech risks.

Conclusion: A Solid Low-Volatility Option, but Not the "Best"

Boston Scientific is a solid low-volatility investment, but whether it’s the best depends on investor priorities:1. For pure volatility seekers: Abbott (ABT), with its beta of 0.80 and lower valuation, offers superior downside protection.2. For growth-minded investors: BSX’s 14.37% volatility and 32.19x P/E reflect its premium growth potential, though this comes with higher valuation risk.3. Sector exposure: The iShares ETF (FDX), with its 0.85 beta, provides diversified exposure at a lower cost basis.

The data underscores that BSX is not the lowest volatility stock in its sector, but its blend of moderate risk and growth makes it a compelling buy-and-hold option. Investors should pair this with a sector ETF like FDX for diversification and monitor macro risks closely.

In a market where volatility is the norm, Boston Scientific offers a middle ground—not the safest, but a balanced play for those willing to trade modest volatility for growth.

Final Recommendation: Consider BSX for its growth profile, but prioritize ABT or FDX for pure low-volatility exposure.

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