Volatile stock prices, stock market volatilityThe market has been happily catatonic for some months now, blissing out on low volume as stocks just kind of relentlessly grind higher. So no wonder the return of volatility last week was a real kick in the Goldman Sachs (GS). If it feels like equities have been better behaved lately, well, that's because they have been. But it sure couldn't hurt to take the recent market madness as a wake-up call that volatility remains an ever-present risk.

Take the previous week's action. Just when the market seemed to have shrugged off its anxiety over the eurozone debt crisis, a double-whammy downgrade of Greece and Portugal sent the Dow Jones Industrial Average ($INDU) tumbling more than 200 points Tuesday and the S&P Volatility Index -- also known as the VIX ($VIX.X) or "investor fear gauge" -- jumping more than 30%. The Dow then went on to reclaim 175 points over the next two sessions, only to use Friday as an occasion for a 160-point dump.

Now if you're a pro, you love volatility (the bigger the swing, the bigger the score), but for regular schmoes it pretty much only serves to increase risk. After all, the more a stock bounces around, the greater the likelihood of buying high and selling low. Unfortunately, laying off on the risk also means having to forgo the reward. As they say: No guts, no glory.

Low-Beta Winners

But what if you could have the glory without the guts? "Low-beta" stocks, believe it or not, could be an answer.

Beta is a measure of a stock's volatility relative to the broader market. The S&P 500 ($INX) has a beta of 1.0. A stock with a beta above 1.0 is more volatile than the broader market, while a stock with a beta of less than 1.0 is less volatile than the broader market. The knock on stocks with betas of less than 1.0 is that they lag the market when it's rising (in which case you'd be better off just buying an S&P 500 index fund).

But after screening our way through Capital IQ's database of S&P 500 stocks, we found five large caps (at least $50 billion in market capitalization) that have greatly outperformed the broader market over the last five years (it's up less than 3% over that span), while being significantly less risky. Furthermore, by forward price/earnings multiples, these stocks offer discounts to the broader market, making their relative valuations compelling.

For folks looking to beat the market while also sleeping better at night, these five blue-chips could fit the bill:

McDonald's (MCD)
Five-year price change: 141%
Five-year beta: 0.63
Forward P/E vs. S&P 500: 5% discount

IBM (IBM)
Five-year price change: 69%
Five-year beta: 0.79
Forward P/E vs. S&P 500: 30% discount

Chevron (CVX)
Five-year price change: 57%
Five-year beta: 0.65
Forward P/E vs. S&P 500: 46% discount

Coca-Cola (KO)
Five-year price change: 23%
Five-year beta: 0.59
Forward P/E vs. S&P 500: 6% discount

ExxonMobil (XOM)
Five-year price change: 19%
Five-year beta: 0.42
Forward P/E vs. S&P 500: 38% discount

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