The stock market’s a great place to invest for the long haul, but the rollercoaster ride sure does get old sometimes, doesn’t it? That’s why I’m always looking for stocks that can enrich shareholders with as little volatility as possible.

To find them, you generally have to avoid riskier sectors such as tech or energy, and poke around more remote areas of the market. That approach has led me to a compelling, and much safer, growth opportunity.

#-ad_banner-#Upside for this stock is very solid — 40-90% in the next three to five years, according to analysts. Yet the stock is much less volatile than the overall market, as measured by beta. A beta of 1.0 tells us a security mirrors the movements of the market, so the 0.58 beta for this stock means it’s 42% less volatile than the market.

You may never have heard of the company, Markel Corp. (NYSE: MKL), because it’s in an obscure line of business — specialty insurance. The sells some unusual policies, like coverage for racehorses and summer camps. On February 16, the firm announced the addition of wedding and special-event insurance for consumers. On May 2, it announced upgrades to its management liability policies, which cover executives for costs related to mismanagement allegations from regulators, employees and others.

A focus on long-term profitability, not quarterly results and growth targets, sets Markel apart from other insurance companies. Most other insurers can’t resist the temptation to write unprofitable policies to maintain premium growth in soft markets, like the one the insurance industry has been experiencing lately. However, Markel has gone so far as to establish incentives that encourage underwriters to reject unprofitable business. This prevents the company from getting caught up in chasing top-line revenue growth during harder times and has led to an underwriting profit for seven of the past nine years.

Profits usually come easier when there’s scant competition, as in Markel’s case. Would-be competitors usually find they can’t compete on price because Markel has developed so much specialty insurance expertise that it can almost always operate more cost-effectively. Conversely, few potential rivals can match Markel in expertise with complicated policies where price isn’t necessarily the main consideration.

To boost shareholder returns, Markel maintains a $1.8 billion investment portfolio made up mainly of stocks. Under value manager Tom Gayner, the portfolio returned 332% during the 15-year period ending December 31, 2010, outperforming the S&P 500 by 162% during that time. As of March 31, 2011, Gayner’s top holdings included names like Wal-Mart (NYSE: WMT), Exxon Mobil Corp. (NYSE: XOM), General Electric (NYSE: GE), Anheuser-Busch (NYSE: BUD) and Microsoft Corp. (Nasdaq: MSFT).

Importantly, earnings and book value (a key metric for insurance companies) have grown nicely in the long-term, rising an average of 12% and 14%, respectively, for the past 10 years. During that time, investment income jumped 7.5% annually while premium income rose at a clip of 11.5%.

The company should continue to grow consistently for the next four or five years at least, especially once the soft market subsides — though growth may not be quite as rapid as before. Analysts expect earnings and book value to expand by about 6% and 8%, respectively, through 2016.

The Markel Ventures division has been busy investing in profitable businesses outside of specialty insurance. On January 3, for example, it acquired a majority interest in Diamond Healthcare Corp, a leading provider of behavioral health services to hospitals and other health care institutions. Retail intelligence firm RetailData LLC was acquired by Markel only a few weeks earlier.

Although Markel’s stock price of about $413 a share may seem lofty, shares are actually undervalued by as much as 20%. By my figuring, they should be trading for at least $494, based on a historic price-to-book (P/B) ratio of 1.5 (the current P/B is just under 1.3). If you multiply that 1.5 P/B ratio by the current book value per share of $329.09, you get $494.

Action to Take –> If you want attractive returns with a lot less volatility, consider investing in Markel Corp. The stock doesn’t gyrate like the rest of the market, and it has a long history of enriching shareholders, delivering an average annual return of 11.3% for the past 15 years. Based on analyst forecasts and current efforts to ensure top-notch performance, I see no reason why it shouldn’t do that for another four to five years — or even a lot longer.

P.S. — I don’t know if you’re aware of this or not, but a 20-year energy agreement between the United States and Russia is about to expire. The problem is, this deal supplies 10% of America’s electricity. When the Russians refuse to renew the agreement, the U.S. will face an entirely new kind of energy crisis. This disruption could send a handful of energy stocks through the roof. Keep reading…