While the concept of energy stocks to buy might seem overdone at this point of the year, the segment may still offer substantial upside. Fundamentally, one of the catalysts that sparked the wild rally centered on the Federal Reserve. Specifically, its accommodative policies during the initial wave of the coronavirus pandemic blew up the money stock. Now, we’re dealing with the consequences of high inflation. Still, the Fed isn’t the only factor bolstering energy stocks to buy.

Geopolitically, 2022 has been a tense and bloody year, with Russia’s invasion of Ukraine still ongoing. Further, the Kremlin decided to cut hydrocarbon outflows to Europe, sparking serious concerns about the coming winter. With supply artificially limited against a rising demand backdrop, the energy sector will likely see value appreciation.

Nevertheless, not every player among energy stocks to buy presents an equally bullish narrative. To help guide prospective investors to make an appropriate decision for them, I used Gurufocus.com to filter out market ideas that are relatively underappreciated. These trades could offer far greater returns than something that’s already running red hot.

Valero Energy (VLO)

Based in San Antonio, Texas, Valero Energy (NYSE:VLO) is an international manufacturer and marketer of transportation fuels, other petrochemical products, and power. Due to unprecedented relevancies, Valero absolutely soared, similar to other energy stocks to buy. On a year-to-date basis, VLO gained over 68%. Further, in the trailing month, shares swung higher by nearly 16%.

Following such a robust move, you might think that VLO would be overvalued at this point. However, the opposite rings true, at least according to Gurufocus.com. The investment resource rates the investment as modestly undervalued. For instance, VLO trades for 5.5 times trailing-12-month (TTM) earnings. In contrast, the industry median price-earnings ratio is 8.9 times. Just as importantly, Valero enjoys stability in the balance sheet. Primarily, the company features an Altman Z-Score of 5.36, reflecting very low bankruptcy risk. Also, its debt-to-EBITDA ratio is 0.75, favorably below 73% of the competition. Thus, if you’re looking for discounted energy stocks to buy that will also allow you to sleep easier, VLO may be it.

Woodside Energy (WDS)

Based in Perth, Australia, Woodside Energy (NYSE:WDS) is a petroleum exploration and production company. Per its public profile, Woodside also represents Australia’s largest independent dedicated oil and gas company. It’s one of the top-performing energy stocks to buy, with WDS shares returning 49% YTD. Momentum also runs strong recently, with WDS moving up 11% in the trailing month. Financially, Woodside draws much intrigue among investors looking into the hydrocarbon space because of its stability. For example, the company features a cash-to-debt ratio of 3.16 times, ranked higher than nearly 70% of its peers. While cash always presents pertinence, it’s especially critical now due to broader macroeconomic vagaries. So, if the smelly stuff hits the proverbial fan, WDS may be able to better weather the storm than its rivals.

Just as well, Woodside represents a profitability machine. For instance, the company’s net margin stands at 31.7%, ranked higher than almost 85% of the competition. In addition, Woodside’s return on equity pings above 17%, reflecting a quality enterprise.

Profire Energy (PFIE)

Founded in 2002, Profire Energy (NASDAQ:PFIE) is an oilfield technology company. Specifically, Profire specializes in the design of burner-management systems and other combustion-management technologies. Unlike many other energy stocks to buy, though, PFIE finds itself in the red. Since the beginning of this year, shares dipped over 7% below parity. However, in the trailing month, PFIE popped up by 10% exactly. For contrarian speculators, this dynamic may open an opportunity. That’s because, unlike your standard market-related gamble, Profire brings the fundamentals to the table. For instance, its cash-to-debt ratio stands at a whopping 53.3 times. In contrast, the industry median is only 0.51 times. This metric provides greater flexibility for Profire if broader circumstances go awry.

Additionally, investors should note that the company’s Altman Z-Score stands at 6.55. This indicates very low bankruptcy risk, providing reassurance in a typically volatile sector. Finally, Profire features a profitable track record, with eight years of consecutive positive earnings during the past decade. Therefore, PFIE provides a reasonable platform to roll the dice on energy stocks to buy.

Dril-Quip (DRQ)

Headquartered in Houston, Texas, Dril-Quip (NYSE:DRQ) represents one of the world’s leading manufacturers of precision-engineered offshore drilling and production equipment. Its products provide effective solutions for deepwater, harsh environments, and severe service applications. Since the beginning of the year, DRQ gained a relatively modest 10%. However, in the trailing month, shares swung up 12%.

While the underlying business itself (which serves the upstream component of the hydrocarbon sector) presents myriad relevancies, during these uncertain times, cash is king. Dril-Quip has plenty of it. Per its balance sheet, the company’s cash-to-debt ratio stands at a stunning 66.7 times. Again, the industry median metric sits at only 0.51 times. Combined with an Altman Z-Score of 7.13, DRQ epitomizes one of the most resilient energy stocks to buy. Plus, as a bonus, it features other intriguing stats. For instance, its three-year free cash flow (FCF) growth rate is 30.4%, better than 72% of the industry. Also, the company enjoys six years of consecutive profitability in the trailing decade.

Evolution Petroleum (EPM)

Also headquartered in Houston, Texas, Evolution Petroleum (NYSEAMERICAN:EPM) is an independent energy company focused on maximizing total returns to its shareholders through the ownership of and investment in onshore oil and natural gas properties in the U.S., per its website. Since the January opener, EPM gained a very healthy 52.3%. In the trailing month, EPM moved up nearly 9%.

Fundamentally, what sticks out the most for Evolution Petroleum is its income-statement metrics. On the top line, the company’s three-year revenue growth rate stands at 35.9%, rated higher than nearly 93% of the competition. Also, its EBITDA growth rate during the aforementioned period is 25.2%, better than 75% of its peers. On the bottom line, Evolution’s net margin pings just under 30%. In contrast, the industry median is only 3.91%. As well, the company’s return on equity sits just south of 52%, reflecting an extremely high-quality business.

Plus, as a bonus, Gurufocus.com rates EPM as a significantly undervalued investment based on proprietary calculations. Thus, if you’re looking for under-the-radar energy stocks to buy, EPM may intrigue certain market participants.

Epsilon Energy (EPSN)

Another underappreciated player among energy stocks to buy, Epsilon Energy (NASDAQ:EPSN) also hails from the Lone Star State. An independent firm, Epsilon engages in the acquisition, development, gathering, and production of oil and gas reserves. From the beginning of the year, the ticker EPSN (not to be confused with the sports channel ESPN) gained 24%. Also, in the trailing month, the stock gained 11%.

Primarily, Epsilon will attract investors in energy stocks to buy because of its fiscal stability. The company has no debt, making it elite within the sector. Not surprisingly, Epsilon also carries an Altman Z-Score of 5.7, reflecting low bankruptcy risk. Again, should outside circumstances go awry, EPSN represents one of the few companies in the space that can absorb shocks. But it’s not just a punching bag either. Epsilon features tremendously strong profitability margins. For instance, its gross, operating, and net margins stand at 73.3%, 63.4%, and 42.7%, respectively. Additionally, the company’s return on equity of 32.7% beats out 80% of the competition, making it a very high-quality business.

Solaris Oilfield (SOI)

If you want to gamble heavily in energy stocks to buy, Solaris Oilfield (NYSE:SOI) may have something for you. Specializing in providing solutions to optimize wellsite safety, Solaris helps energy infrastructures run at maximum efficiency. Unfortunately, Wall Street didn’t feel safe with Solaris’ third-quarter earnings report, where the company posted worse-than-expected sales results. In turn, SOI plunged nearly 20% in the Nov. 1 session.

For the year, though, SOI gained a robust 56%. And even with the Tuesday loss, shares gained almost 11% in the trailing month. That suggests that Solaris may be a resilient business that merely suffered a blip (albeit a sharp one). Over time, it can make up for the losses, suggesting that contrarians should buy the dip.

It’s a complicated and risky narrative to be sure. However, one factor that could sway certain traders is the balance sheet. With a cash-to-debt ratio of 1.75 times (better than nearly 66% of the competition), Solaris enjoys fiscal stability.

On the date of publication, Josh Enomoto did not have (either directly or indirectly) any positions in the securities mentioned in this article. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.