Last year oil had a similar hiccup to what we have seen over the past month, when it rallied and then gave it all back. But some are convinced this year is different, and with good reason. Many are pointing to a return of Libyan production and exporting, which some on Wall Street remain highly skeptical of. In fact, recently the National Oil Corporation of Libya chairman said in a letter to the UN envoy that the attacks by the Islamic State had damaged infrastructure and that the ports in question would struggle to export more than an additional 100,000 barrels per day in the near term.

Last year oil prices rallied in the second quarter and then petered out over the balance of the year and into 2016. With major production cuts and rig counts well below two years ago, now may be a good time to nibble at some of the top stocks that have been hammered over the past month. The bottom line is that over the next two years oil probably goes higher, but the path will be volatile to say the least.

We found four top stocks with yields all over 4%. All are rated Buy at various firms we cover on Wall Street.

Chevron

This stock is very solid story for investors looking to stay long the energy sector, and it is a preferred U.S. company to own now. Chevron Corp. (NYSE: CVX) is an integrated oil and gas company with worldwide operations in exploration and production, refining and marketing, transportation and petrochemicals. It sports a sizable dividend and has a solid place in the sector when it comes to natural gas and liquefied natural gas (LNG). Some on Wall Street estimate the company will have a compound annual growth rate of over 5% for the next five years.

The company’s Permian Basin assets are a goldmine, and that the Australian LNG business will transition from a yearly $8 billion capital consumption drag to a $2 billion to $3 billion contributor. Combined with the much lower overall capital spending for the 2016 to 2018 period, the company is poised to not only hang around, but end the sector slump in a much better position. The analysts note the Permian acreage is profitable at $40 a barrel.

Jefferies hosted a meeting with the company’s CEO, John Watson, in the spring. He made it clear that preserving the dividend for investors is the top priority. Jefferies also points out that although the company trades in line with its peers, the growth potential and solid balance sheet deserve a 10% premium.

Chevron investors receive a 4.32% dividend. The Jefferies price target for the stock is $116, and the Wall Street consensus price target is $110.61. Shares closed trading Monday at $99.11.

Occidental Petroleum

This is one of the higher yielding domestic stocks in the energy sector. Occidental Petroleum Corp. (NYSE: OXY) is an international oil and gas exploration and production company with operations in the United States, Middle East and Latin America. It is one of the largest U.S. oil and gas companies, based on equity market capitalization. Its midstream and marketing segment gathers, processes, transports, stores, purchases and markets hydrocarbons and other commodities in support of Occidental’s businesses. In addition, the wholly owned subsidiary OxyChem manufactures and markets chlor-alkali products and vinyls.

While the company reported a first-quarter 2016 loss that was wider than the consensus forecast, Occidental did report total revenue that beating the Wall Street estimates. The company continues to deliver capital expenditure cuts, and the expected total of $3 billion for this year is a mind-numbing cut of 50% from 2015 expenditures. Second-quarter results are due this week.

With a rock-solid balance sheet and a commitment to dividend coverage, investors look safe for now. Occidental has paid quarterly cash dividends continuously since 1975, and it has increased its dividend each year since 2002.

Shareholders receive a 4.13% dividend. Merrill Lynch has an $87 price target, and the consensus target is $78.14. Shares closed on Monday at $73.59.
Royal Dutch Shell

This company survived last year’s the plunge in oil pricing plunge as good as or better than any other major integrated stock. Royal Dutch Shell PLC (NYSE: RDS-A) operates as an independent oil and gas company worldwide through its Upstream and Downstream segments. The company explores for and extracts crude oil, natural gas and natural gas liquids.

Royal Dutch Shell also converts natural gas to liquids to provide fuels and other products; markets and trades crude oil and natural gas; transports oil; liquefies and transports gas; extracts bitumen from mined oil sands and converts it to synthetic crude oil; and generates electricity from wind energy.

In addition, the company engages in the conversion of crude oil into a range of refined products, including gasoline, diesel, heating oil, aviation fuel, marine fuel, liquefied natural gas for transport, lubricants, bitumen and sulphur; production and sale of petrochemicals for industrial customers; refining; trading and supply; pipelines and marketing; and alternative energy businesses.

The company’s $50 billion acquisition of BG Group finally closed in February, and a reported 2,800 jobs will be cut. This continues the reorganization efforts that began last year with 7,500 job cuts.

Investors are paid a huge 6.45 % dividend. The Merrill Lynch price target is $58, and shares closed Monday at $49.58.

Total

This is another giant European energy giant, this one based in France. Total S.A. (NYSE: TOT) is a global integrated energy producer and provider, a leading international oil and gas company, and the world’s second-ranked solar energy operator with SunPower.

The company operates through three segments. The Upstream segment explores and produces oil and gas; ships, trades and markets natural gas, liquefied natural gas and liquefied petroleum gas (LPG); generates power; and mines and markets coal.

The Refining & Chemicals segment refines and produces petrochemicals and provides sealing, insulation, fluid transfer and transmission and transportation solutions, as well as offers chemical processes and services for electronics, surface finishing and semiconductor manufacturing. It is also involved in trading and shipping crude oil and petroleum products.

The Marketing & Services segment supplies and markets petroleum products, including automotive fuels, biofuels, home heating oil and heavy fuel oil, lubricants, LPG, asphalt, aviation fuel, additives and special fuels and special fluids through service stations for light vehicles and trucks.

The main drivers behind the company’s ability to stay profitable include an increase in oil and gas manufacturing and strong growth in the company’s very profitable refining division.

Total investors receive a 4.95% dividend. The $58 Cowen price target compares with the consensus target of $54.40 and the most recent close at $46.63.

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These are the kind of large cap market leaders that make good sense in long-term growth and income portfolios. Investors may want to buy partial positions as the oil slide may not quite be over.

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