Any way you look at it, the oil trade has been a tough one. Needless to say, a huge price decrease in the commodity that drives the industry will always separate the good companies from those that are over-leveraged. Plus, rather than trying to grab the proverbial falling knife, it’s often better to see if a rally is the real deal. With oil going through the $40 mark, it broke a downtrend line that came from highs printed almost two years ago.

The question is which stocks to buy now. Despite the rally, there is always the chance that oil rolls back over. The smart move is to stay with the leaders that pay good dividends. We screened the Merrill Lynch energy universe and found four rated Buy that still look very attractive.

Exxon Mobil

This is one of Merrill Lynch’s top picks for 2016.  Exxon Mobil Corp. (NYSE: XOM) is a solid large cap energy sector play that the Merrill Lynch analysts are very positive on long-term as the overall corporate strength of the massive integrated giant plays a significant part in the company’s usually solid earnings reporting pattern and in maintaining dividend coverage.

The global downstream chemical segment plays a huge part for Exxon, one that many others on Wall Street don’t fully appreciate as the segment contributes an estimated 16% of overall total revenue. Very solid reasons for adding the stock to a long-term growth portfolio are that the company has consistently demonstrated disciplined investing, operational excellence and technological innovation.

Exxon recently appointed the head of its refining business as its new president, which makes him the probable successor to Chief Executive Officer Rex Tillerson, a move designed to avoid raising eyebrows on Wall Street. The new president, Darren Woods, is a 23-year company veteran and should keep the company on the steady path for growth and progress.

Exxon investors receive a sizable 3.47% dividend. The Merrill Lynch target for the stock is $95. The Thomson/First Call consensus price objective is $80.52. Shares closed on Friday at $84.20.

Enterprise Products Partners

This is one of the largest publicly traded partnerships and a leading North American provider of midstream energy services to producers and consumers. Enterprise Products Partners L.P. (NYSE: EPD) once again, despite the energy slump, recently raised its distribution 1%. The company maintains a very good long-term position in the market. It provides many of its services on the basis of long-term, fixed-fee contracts, insulating against some of the wilder swings of the commodities that it trades in.

One reason many analysts may have a liking for the stock is its distribution coverage ratio. That ratio is well above 1x, making it relatively less risky among the master limited partnerships. The company’s distributions have grown for several quarters and are expected to continue in 2016. Plus the current Standard & Poor’s rating is BBB+, which is investment grade, and the outlook is stable

Investors receive a 6.12% distribution. The $28 Merrill Lynch price target is lower than the consensus target of $32.05. Shares closed Friday at $25.50.

Marathon Petroleum

This top refiner rolled over after fourth-quarter earnings and may be offering an outstanding entry point. Marathon Petroleum Corp. (NYSE: MPC) has a diversified business that operates through Refining & Marketing, Speedway, and Pipeline Transportation segments. The company owns and operates seven refineries in the Gulf Coast and Midwest regions of the United States that refine crude oil and other feedstocks, and its distributes refined products through barges, terminals and trucks, as well as purchases ethanol and refined products for resale.

While acknowledging that the company’s margins may have compressed some, many on Wall Street also expect strong revenue contribution from the assets acquired from Hess. Last year the company converted almost all the Hess stations to the company’s Speedway brand.

For the fourth quarter, Marathon Petroleum’s posted net income that fell by 77% over from the prior year. This was due in part to declines in the operating incomes of its refining and Speedway segments and partly offset by a rise in income from its midstream segment. The company also took a combined charge of $370 million in the quarter that came from the lower market inventory valuation levied on its refining and Speedway segments.

Marathon shareholders receive a 3.5% dividend. Merrill Lynch has a $50 price target, while the consensus target is $53.67. Shares ended trading on Friday at $38.23.

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.

The company’s 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.

For the fourth quarter, the company reported an adjusted loss that was worse than Wall Street analysts’ consensus estimate. Occidental Petroleum reported a profit in the same period of 2014.

Merrill Lynch notes that 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% over 2015 expenditures. With its 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 has increased its dividend each year since 2002.

Occidental investors receive a 4.38% dividend. The Merrill Lynch price objective is posted at $85. The consensus target is $73.31. Shares closed Friday at $71.30.

There is a good chance the oil pricing remains volatile, but breaking the long downtrend line is significant, and if supply continues to drop due to the fall-off in production, the worst may be over.

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