While the inflation volcano and the geopolitical crisis of Russia’s invasion of Ukraine bolstered energy stocks to buy last year, in the new year, circumstances don’t seem so auspicious. With the Federal Reserve committed to tackling rising prices through interest rate hikes, commoditized products – including energy resources – seem destined to decline.

To be sure, the sector won’t be an easy one to participate in for those that can’t handle volatility. However, for astute contrarians, energy stocks to buy offer an enticing opportunity because of their discounts relative to recent highs. Also, the below enterprises feature a compelling mix of fiscal stability and attractive pricing based on earnings multiples.

Marathon Petroleum (MPC)

An American petroleum, refining, marketing, and transportation company, Marathon Petroleum (NYSE:MPC) blends in a mixture of midstream and downstream specialties. Overall, the company should become more relevant as social behaviors (i.e. vehicular traffic patterns) fully normalize. Seemingly, the market anticipates the same, driving up MPC by almost 22% since the start of the year.

Moreover, MPC gained a staggering 59% in the trailing one-year period. Despite the outperformance, MPC represents one of the energy stocks to buy at a fundamental discount. Specifically, the market prices MPC at a trailing multiple of 4.72. As a discount to earnings, Marathon Petroleum ranks better than 68.79% of the field.

Also, it’s an operational powerhouse, posting a three-year revenue growth rate of 27.1% and an EBITDA growth rate (during the same period) of 60.9%. As well, its Altman Z-Score pings at 4.03, reflecting low bankruptcy risk. Finally, Wall Street analysts peg MPC as a consensus strong buy. Their average price target stands at $149, implying almost 11% upside potential.

Valero Energy (VLO)

A downstream petroleum company, Valero Energy (NYSE:VLO) mostly specializes in manufacturing and marketing transportation fuels, other petrochemical products, and power. Currently, Valero commands a market capitalization of $51.35 billion. Since the start of the year, VLO gained over 16%. In the trailing one-year period, it’s up nearly 38%.

Despite the robust outperformance, VLO ranks among the energy stocks to buy. In particular, the market prices VLO at a trailing multiple of 4.79. As a discount to earnings, the energy firm ranks better than 68.49% of the oil and gas industry. Also, shares trade at 0.31 times sales. In contrast, the sector median value is 0.94 times. Operationally, Valero posts a three-year revenue growth rate of 19.4%. Also, its book growth rate during the same period is 5.9%, above 65.52% of sector peers. Lastly, covering analysts peg VLO as a unanimous strong buy. Their average price target stands at $162.47, implying over 16% upside potential.

PBF Energy (PBF)

Based in New Jersey, PBF Energy (NYSE:PBF) is a petroleum refiner and supplier of unbranded transportation fuels, heating oils, lubricants, petrochemical feedstocks, and other petroleum products. Since the start of the new year, PBF gained over 15% of its equity value. In the past 365 days, it skyrocketed over 75%.

As impressive as its performance is, PBF ranks among the energy stocks to buy at a fundamental discount. Right now, the market prices PBF at a forward multiple of 5.19. As a discount to projected earnings, the company ranks better than 68.92% of sector rivals. In addition, PBF’s Altman Z-Score pings at 5.11, reflecting strong fiscal stability. Operationally, the enterprise posts a three-year revenue growth rate of 22.4%.

Its FCF growth rate during the same period stands at a stunning 95.9%. In closing, analysts peg PBF as a consensus moderate buy. Their average price target clocks in at $52.11, implying over 20% upside potential.

Phillips 66 (PSX)

A downstream energy specialist, Phillips 66 (NYSE:PSX) should continue to build up as relevancies rise. So far this year, PSX only managed to squeak above parity. However, in the trailing one-year period, shares gained 18% of equity value. With social normalization trends rapidly accelerating, pre-pandemic traffic volumes should return, thus benefitting Phillips 66.

Because of society’s trajectory, investors should do well to consider PSX as one of the energy stocks to buy. For starters, the market prices PSX at a trailing multiple of 4.42. As a discount to earnings, the energy firm ranks better than 71.01% of the oil and gas industry.

Also, the company’s Altman Z-Score is 4.1, indicating low bankruptcy risk. On the operational side, Phillips 66 features a three-year revenue growth rate of 14.9%.  This stat ranks above 66.52% of the industry. Turning to Wall Street, analysts peg PSX as a consensus moderate buy. Their average price target stands at $129, implying over 27% upside potential.

Magnolia Oil & Gas (MGY)

Headquartered in Houston, Texas, Magnolia Oil & Gas (NYSE:MGY) represents an exploration and production (upstream) company. Currently, the company commands a market cap of $4.95 billion. Since the start of the year, MGY slipped a bit more than 1%. In the past 365 days, it gave up more than 8% of its equity value.

If you can overlook the red ink, Magnolia may offer one of the discounted energy stocks to buy. Notably, the market prices MGY at a trailing multiple of 4.65. As a discount to earnings, the company ranks better than 69.38% of sector rivals. In addition, Magnolia features a cash-to-debt ratio of 1.73, above the sector median value of 0.53 times.

In terms of operations, the company’s three-year revenue growth rate pings at 16.9%. This stat comes in above nearly 70% of the competition. Looking to the Street, analysts peg MGY as a consensus strong buy. Their average price target stands at $29.21, implying upside potential of almost 34%.

Enerplus (ERF)

One of Canada’s largest independent oil and gas producers, Enerplus (NYSE:ERF)  holds hydrocarbon properties in the U.S. and in western Canada. Presently, Enerplus carries a market cap of $3.43 billion. Since the beginning of the year, ERF gave up 11% of its equity value. However, shares managed to swing higher to the tune of nearly 13% in the trailing year.

While ERF did print some positive figures in the charts, it still ranks among the discounted energy stocks to buy. Primarily, the market prices ERF at a forward multiple of 5.48. As a discount to projected earnings, Enerplus ranks better than 64.92% of the oil and gas industry. Also, the enterprise features a debt-to-equity ratio of 0.26 times, lower than the sector median value of 0.43.

Operationally, Enerplus’ three-year revenue growth rate pings at 34.2%. Its FCF growth rate during the same period is a staggering 147.3%. Finally, covering analysts peg ERF as a consensus moderate buy. Their average price target comes out to $20.69, implying almost 44% upside potential.

Arch Resources (ARCH)

To conclude this list of energy stocks to buy, we’ll end with Arch Resources (NYSE:ARCH). Unlike the other enterprises, Arch focuses on coal mining and processing. Although it might seem like an antiquated business, a considerable amount of electricity generated in the U.S. stems from coal. However, since the beginning of this year, ARCH dipped nearly 2%. In the past 365 days, shares gave up almost 7% of equity value.

While it might be one of the riskier bets among energy stocks to buy, it’s also attractive to speculators. For instance, the market prices ARCH at only 2.05 times trailing earnings, which on paper is deeply undervalued. Further, ARCH trades at 2.67 times FCF. In contrast, the sector median value is 3.96 times.

On the bottom line, Arch features a net margin of almost 36%. That’s a robust figure, beating out 86.61% of the competition. Lastly, analysts peg ARCH as a unanimous strong buy. Their average price target stands at $201.33, implying over 53% upside potential.

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.