A decade ago, if someone said the word “fracking” in front of their mother, they might have gotten their mouth washed out with soap. Today, we know the term as a new way to drill for shale oil and gas that has the ability to change the global energy landscape. In fact, it has changed the landscape so much that billionaire Saudi investor Prince Alwaleed bin Talal recently sent a letter to the Saudi Oil Minister warning of the threat to the Saudi oil industry.

In a new report, Merrill Lynch focused on the stocks that are directly benefiting the most from the fracking revolution. The procedure that was perfected in the 1980s and 1990s by the legendary and recently deceased oil pioneer George Mitchell’s company Mitchell Energy, and it has changed the game in oil and gas production. Here are Merrill Lynch’s top stocks to buy that will have the greatest direct benefit.

Oil Services and Equipment

Baker Hughes Inc. (NYSE: BHI) posted a solid second quarter, with revenues growing 5% over the first quarter. Merrill Lynch has posted a $59 price target for the stock. The Thomson/First Call estimate stands at $54. Investors are paid a 1.3% dividend.

Emerge Energy Services L.P. (NYSE: EMES) was a new IPO in May and has had a strong debut on Wall Street. This master limited partnership (MLP) supplies sand to oil and gas drillers for blasting through rocks in the hydraulic fracturing process. The Merrill Lynch price target is $27, while the consensus is also at $27. Investors are paid a huge 10.07% distribution. MLP distributions may include return of principal.

Forum Energy Technologies Inc. (NYSE: FET) had an earnings hiccup in the second quarter that is expected to be a minor bump in the road. The heavy sell-off after the earnings disappointment may give investors a solid entry point. Merrill Lynch has a $32 price target, the same as the consensus target.

National Oilwell Varco Inc, (NYSE: NOV) is on the top stocks to buy list at many of the Wall Street firms that we cover. Although earnings for the second quarter showed some weakness in margins, the company announced a record backlog of business that stood at a stunning $13.95 billion. Merrill Lynch has a $86 price target posted, and the consensus target is at $84. Investors receive a 1.4% dividend.

Oil and Gas Producers

Cabot Oil & Gas Corp. (NYSE: COG) focuses on the Marcellus Shale in Pennsylvania, with approximately 200,000 net acres in the dry gas window of the play; the Eagle Ford in south Texas, with approximately 60,000 net acres in the oil window of the play; and the Marmaton oil play in Oklahoma, with approximately 70,000 net acres in the play. The company also transports, stores, gathers and produces natural gas for resale. Merrill Lynch has a $47 price objective on this pure play producer, and the consensus stands lower at $41. Investors are paid a tiny 0.1% dividend.

Chesapeake Energy Corp. (NYSE: CHK) has been one of the most scrutinized domestic producers over the past decade. Finally free of the sometimes bizarre actions of cofounder Aubrey McClendon, the company has refocused its efforts and is hitting on all cylinders. The company has some acreage for sale in the Eagle Ford that recently had a large oil and gas find in a section called the Buda. Merrill Lynch has a $36 price target, and the consensus target is much lower at $24. Investors are paid a 1.4% dividend. The Merrill Lynch target is the highest on Wall Street and would represent an almost 50% gain from current levels.

Continental Resources Inc. (NYSE: CLR) reported huge second-quarter numbers. The company is a top player in the Bakken shale and produced 88,000 barrel of oil equivalent per day in the quarter, up 65% over last year’s production. The Merrill Lynch price target is $120 for this top performing stock.

EOG Resources Inc. (NYSE: EOG) was another company that totally blew out earnings in the second quarter. The company’s quarter was a showcase of exceptional data, including crude oil and condensate revenue growing 46% year-over-year on a 35% hike in production. Merrill Lynch has put a $190 price target on the stock, and the consensus target stands at $175. Investors are paid a small 0.5% dividend

Pioneer Natural Resources Co. (NYSE: PXD) is one of the top players in Texas in the Permian Basin and Eagle Ford shale. With strong earnings and a raised set of expectations, the company is a true fracking success story. Merrill Lynch has a $225 target, and the consensus is set at $191.50.

Range Resources Inc. (NYSE: RRC) was a former high-flyer that has had a fracking rebirth. The company raised cash last February when it sold $275 million in liquid-rich assets in the Permian Basin. Merrill Lynch has a $100 price target, and the consensus is at $91. Investors are paid a small 0.2% dividend.

The hydraulic fracturing revolution is not only helping the U.S. establish energy independence, it is helping to put some strength back in our domestic economy. States like Texas and North Dakota have some of the lowest unemployment rates in the country. This new technology shows that American ingenuity is alive and well, and that is good thing for all of us.

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