Clean Energy still has huge upside, but these three stocks are probably better buys right now. Source; Clean Energy Fuels.

I'm a big fan of Clean Energy Fuels Corp. (CLNE -1.15%), and I see a bright future for natural gas as a transportation fuel. This is especially true for medium- and heavy-duty vehicles, applications where electric and hydrogen are decades away from being workable solutions.

The company, however, still has a long way to go to get to profitability, and may see its growth rate slow this year in the face of continuing low oil prices. Plus, it still has debt issues that create some risk for investors.

At the same time, demand for natural gas has multiple drivers beyond transportation, including electricity production, a feedstock for chemical manufacturing, and expansion of its export. With that in mind, here's a look at three lower-risk stocks that investors should probably buy before Clean Energy Fuels. 

A cornerstone in diesel and natural gas engines 
Engine-maker Cummins Inc (CMI -0.80%) is more than a leading diesel expert, though the company's technological expertise, particularly on low-emissions, has it far ahead of its competitors. Its partnership with Westport Innovations Inc(WPRT 0.56%), Cummins Westport -- or CWI -- is a key maker of natural-gas engines for medium- and heavy-duty vehicles.

Cummins is positioned to win from diesel and natural gas. Source: Author.

The ISL G 8.9 liter natural-gas engine made by CWI is installed in more trash trucks sold in the U.S. than any other engine, period. It's also a leading engine for transit buses, while the ISX12 G engine for heavy-duty applications is the primary natural-gas engine made for heavy trucking. Furthermore, this year, CWI is launching the ISB 6.7G, targeting the school bus and medium-duty market, and the ISL G Near-Zero, which will produce the lowest emissions of any combustion engine available. 

Cummins is positioned to play a major role in the growth of natural gas as a vehicle fuel, even as it remains the leader in diesel engines. 

Lastly, the downturn in global demand for its engines has made the stock relatively cheap on an historical basis. It currently trades at a price-to-earnings ratio of less than 14, which is reasonable compared to recent valuations. The current price also has the stock yielding nearly 3.5%, a substantial payout that's likely to grow. Cummins has increased its dividend nearly every year for decades, and currently pays out less than half of its earnings, giving the company a lot of room to spare. 

When the demand cycle returns to growth, Cummins will have looked like an absolute bargain at today's prices. 

Moving natural gas from the field to consumers 
ONEOK (OKE 0.47%) plays a key role in providing the infrastructure that connects natural gas producers to end markets, no matter what it will be used for. 

ONEOK is set to win from the long-term growth in gas demand, despite short-term concerns. Source: ONEOK.

There is short-term risk. A huge glut of gas in storage after an unseasonably warm winter drawdown period has left gas prices at decade lows, and it's likely that producers will be much slower to expand production. This could mean slower growth for ONEOK this year as its gas-producing customers cut back expansion plans until gas prices recover.

At the same time, however, ONEOK services dozens of gas producers, and no single customer accounts for more than 10% of its business. That reduces the risk of a single customer's struggles taking a bite out of the company's cash flows if the gas downturn persists. Management has lined up substantial funding to support capital growth during the next year, and is on track to receive more than enough cash flows to support its dividend, which is yielding more than 8% at recent stock prices. 

When Big Oil benefits from cheap prices 
Phillips 66 (PSX 1.65%) isn't like other mega-oil companies with oil and natural gas production operations. Phillips 66 operates three primary businesses: refining and marketing, midstream, and petrochemicals manufacturing.

Image Source: Phillips 66.

The refining and chemicals segments are consumers, buying oil to refine gasoline, diesel, motor oil and others, and natural gas to produce key ingredients in thousands of products ranging from fertilizer to storage containers to medical devices. The midstream segment is also largely insulated from commodity prices, focusing on distribution, storage, and gathering of natural gas and NGLs. And while NGLs have been a weak spot in a joint venture gathering business in recent years, the long-term growth in gas demand will drive this segment for years to come. 

In other words, cheap oil and gas won't hurt Phillips 66 in the same manner it does producers. In some cases, cheaper feedstocks can actually benefit Phillips 66. Furthermore, the growth in gas demand -- driving the company's growth investments in midstream and chemicals -- is key to the company's long-term value. 

Phillips 66 shares have rebounded after falling sharply earlier this year, but still represent a fair value. Factor in a dividend that's yielding 2.5% at current prices, and is likely to grow substantially during the next decade, and Phillips 66 is an investment that deserves a spot in your portfolio. 

It's all about balance 
I'm still a big fan of Clean Energy Fuels, but the reality is, no single stock should carry too much weight in an investor's portfolio. For that reason, investors who are drawn to Clean Energy should at least consider Cummins, Phillips 66, and ONEOK first. All three are set to benefit from the growth in natural gas, but are also insulated from much of the risk that Clean Energy faces, as well as being solidly profitable companies right now. 

That doesn't mean Clean Energy isn't worth consideration. Just make sure you consider the risks, and think about both the downside and upside. That may make one of these three a better choice for your investing dollars today.