Who would have ever thought just one short year ago that the price of oil breaking through $60 would be a victory. The fact of the matter is that while the crude oil rally has been dramatic, volatility in the sector could be here for a while. A new research report from Jefferies notes that in oil services, proppant use is starting to jump, and that is positive for the top companies in the sector.

While the Jefferies team is far from pounding the table on the sector, they do have their favorite stocks to buy. We scanned the firm’s coverage universe of companies, and found four stocks rated Buy that had at least 20% upside to the Jefferies price target.

Atwood Oceanics

This company is one of two offshore drillers that Jefferies is bullish on. Atwood Oceanics Inc. (NYSE: ATW) is a leading offshore drilling company engaged in the drilling and completion of exploration and development wells for the global oil and gas industry. It currently owns 12 mobile offshore drilling units and is constructing two ultra-deepwater drillships.

While the company faces significant re-contracting risk in 2017, which is becoming hard to ignore, an improving world economy and firmer overall oil pricing may help to mitigate that event to a large degree.

Atwood investors are paid a very solid 3.3% dividend. The Jefferies price objective is $38. The Thomson/First Call consensus price target is $33.90. The stock closed Thursday at $29.27.

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Baker Hughes

Baker Hughes Inc. (NYSE: BHI) agreed back in November to a friendly merger with fellow oil field giant Halliburton in a deal worth an astounding $34.6 billion. The tie-up between the two oil field giants raised big questions about whether the takeover could survive antitrust scrutiny, given the level of consolidation that it promises within the oil production services business. Created in 1987 with the merger of Baker International and the Hughes Tool company, the company created innovative products like a rotary bit for drilling wells through rock.

Many Wall Street analysts view owning Baker Hughes as a cheaper way to play Halliburton and the recovery in the fracking business.

Baker Hughes investors are paid a 1.05% dividend. The Jefferies price target is posted at $82. The consensus target is $76.62. The stock closed Thursday at $64.40.

C&J Energy Services

This smaller oil services company is universally liked across Wall Street. C&J Energy Services Inc. (NYSE: CJES) is an independent provider of premium hydraulic fracturing, coiled tubing, wireline, pumpdown and other complementary oilfield services with a focus on complex, technically demanding well completions. In addition to C&J’s suite of completion, stimulation and production enhancement services, the company manufactures, repairs and refurbishes equipment and provides parts and supplies for third-party companies in the energy services industry. Earlier this year the company announced the purchase of Nabors Industries’ production services unit.

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The company fits nicely into the pressure pumping theme favored by many Wall Street analysts, and the company has been mentioned in takeover chatter from time to time. While having traded up nicely from the lows, the stock is still down almost 50% from highs printed last summer.

While the Jefferies price target is $20, the consensus target is set at $18.77. The stock closed Thursday at $14.95 per share.

Rowan Companies

This is another contrarian value play in the energy sector. Rowan Companies PLC (NYSE: RDC) is an offshore driller that might draw some interest if the Jefferies team is correct. The company holds a leading position in high-specification jackup rigs, and its fleet of 30 jackup rigs operates worldwide, including the Middle East, the North Sea, the Mediterranean, Trinidad, Southeast Asia and the Gulf of Mexico.

The worry has been that when the Chinese speculator jackups come to market they could steal away business, but given price and features, the Jefferies team feels that the traditional contractors of jackups would have little if any interest. In fact, they feel that Rowan will see little competition from the rigs, even if they lower pricing down the line.

Rowan investors are paid a 1.9% dividend. The Jefferies price target is $27, higher than the consensus target of $24. Shares close Thursday at $21.57.

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The Jefferies view on the sector as a whole is mostly from the sidelines, as they are less than bullish. However, all these stocks are solid choices, and the upside for patient investors could be dramatic.

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