In a current research report, the oil field service and equipment analysts at Jefferies maintain that investors should be overweight the sector. Demand prospects are solid globally. While demand in the United States has stalled, the analysts expect growth in 2014, which helps drive their perception of attractive value in some of the stocks to buy.

The Jefferies team has four takeaways as it relates to stock selection.

1. A sluggish U.S. outlook for 2013 points to differentiation on quality and cash-efficient growth for onshore services and drilling.
2. Similarly, flattish, if robust, day rate trends in offshore drilling and significant levels of incoming capacity favor companies that have  transformations underway to high grade their fleets and strong medium term earnings growth.
3. Premium valuation steers Jefferies away from significant subsea exposure.
4. They prefer equipment names with leverage to rigs and onshore production.

Here are the top stocks to buy now at Jefferies.

Baker Hughes Inc. (NYSE: BHI) is one of the large cap names favored at Jefferies. The company recently received a major contract to provide services for unconventional development in Argentina, which suddenly has become active, largely on the basis of the Vaca Muerta shale, which is thought by some to contain the world’s second- or third-largest volume of shale reserves. The Jefferies price target for the stock is $56. The Thomson/First Call estimate is $52. Investors are paid a 1.2% dividend.

Halliburton Co. (NYSE: HAL) is another of the Jefferies “top three” on the list of stocks to buy. On Monday morning, Halliburton delivered earnings and revenue figures that beat Wall Street’s expectations. The revenue beat is seen as a positive sign to shareholders who seek to see high growth out of the company. As consumers and business demand for energy continues to rise, companies like Halliburton are well positioned to provide products and services well into the future. The Jefferies target price for this top name is $54, while the consensus is at $51. Investors receive a 1.1% dividend.

Schlumberger Ltd. (NYSE: SLB) also is a large cap leader to buy at Jefferies. The stock caught fire last Friday when the company announced a $10 billion share repurchase program. The company also posted revenue growth of 8.1% year-over year and operating income gains of 12%. The Jefferies price target for this top name is $97, and the consensus target is $95. Shareholders are paid a 1.6% dividend.

Superior Energy Services Inc. (NYSE: SPN) operates through four separate segments: drilling products and services, onshore completion and workover services, production services, and subsea and technical solutions. It is one of the top oil service stocks in the Bakken Shale region. The Jefferies target for the stock is $33. The consensus price objective is $33 as well.

U.S. Silica Holdings Inc. (NYSE: SLCA) is a small cap name that investors may find very interesting. The company’s fastest growing segment is oil and gas proppants, materials meant to keep a fracking fracture open. Selling sand to frackers is what that segment does. The company expects demand for commercial silica in the hydraulic fracturing market to increase by 8% annually through 2016. Jefferies has posted a $27 price target, the same as the consensus target. Investors are paid a tidy 2.2% dividend.

Atwood Oceanics Inc. (NYSE: ATW) specializes in the drilling and completion of exploratory and developmental oil and gas wells. Its fleet of 13 rigs includes semisubmersibles, deepwater drillships and jack-up rigs. It also has three ultra-deepwater drillships under construction. The Jefferies price target for the stock is $64, and the consensus is at $62.

Ensco PLC (NYSE: ESV) has an impressive balance sheet and the company recently boosted its dividend payment by 33% to $2 per share annually. The company reached 90% utilization for its deepwater rigs in the third quarter of 2012, and it is shooting for 95% by the end of 2013. It also posted better-than-expected first-quarter numbers, earning $1.39 per share, compared to $1.16 for the previous year’s quarter. Jefferies has a $72 price target, and the consensus figure is at $70. Investors are paid a solid 3.3% dividend.

With oil prices skyrocketing, you can expect everybody from the large integrated names to the smallest independent exploration and production companies to be expanding their capital expenditure budgets. This translate to more business and future bookings for these top stocks to buy. Investors may want to consider adding one of the large cap names and a smaller name to their portfolios. With most paying dividends, this may be a solid way to play the production boom.

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