While some feel the recent rally in oil is about to run out of steam, there are solid reasons for investors to stay or get involved. The continued unrest in Venezuela could pressure supply, and the U.S. government is considering sanctions against the country for a recent special election vote that increased the power of President Nicolas Maduro and granted his government the ability to rewrite the constitution. While the government claimed 8 million citizens participated and voted in their victory, third-parties estimated that fewer than 4 million Venezuelans actually participated.

With the potential for Venezuelan sanctions, and Middle East nations vowing to continue to cut their production, it may be a solid time to put some capital toward the energy sector. As we have noted previously, energy was the only negative S&P 500 sector in the first half of 2017, and it is probably offering the best value in a rich market.

We screened the Merrill Lynch energy research universe for large cap companies rated Buy that also pay good dividends. We found four top companies that fit the bill perfectly.

Chevron

This integrated giant is a safe way for investors looking to stay or get long the energy sector, and it has big Permian Basin exposure. Chevron Corp. (NYSE: CVX) is a U.S.-based integrated oil and gas company with worldwide operations in exploration and production, refining and marketing, transportation and petrochemicals.

The company 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 reported solid earnings for the second quarter, and analysts have noted that the Permian Basin remains a key source of capital flexibility, and it is a key issue behind their relative preference for Chevron versus some of the other majors. Merrill Lynch analysts noted this in their report:

Permian production is running ahead of guidance with implications on reducing sustaining capital for the broader portfolio. Major project starts, led by Gorgon continue to drive an inflection in free-cash-flow with the cash break-even trending below $50 by 2018.

Chevron shareholders receive a 3.9% dividend. The Merrill Lynch price target for the stock is $120 a share, and the Wall Street consensus price objective is $116.24. Shares closed trading on Tuesday at $110.78.

Exxon Mobil

The world’s largest international integrated oil and gas company remains a top Wall Street energy pick. Exxon Mobil Corp. (NYSE: XOM) explores for and produces crude oil and natural gas in the United States, Canada, South America, Europe, Africa, Asia, Australia and Oceania. It also manufactures and markets commodity petrochemicals, including olefins, aromatics, polyethylene and polypropylene plastics, and specialty products, and it transports and sells crude oil, natural gas, and petroleum products.

The company posted some messy second-quarter results, and Merrill Lynch feels the stock is still an outstanding place for investors to put money now. The team also cites the ability of the company to maintain and cover the cash dividend at lower oil prices as a key positive, and a recent report said this:

Management could do a better job of highlighting unusual items; on review the second quarter met consensus in contrast with a perceived miss. Analysis of operating cash flow suggests Exxon had a second quarter cash break-even of $35 although capex is running 33% below guidance. With $2 billion of free cash in the second quarter before working capital, the company remains a low risk strategic route to reweighting energy portfolios.

Shareholders receive a 3.85% dividend. Merrill Lynch has a $90 price objective, while the consensus target is $83.03. The stock closed Tuesday at $80.17.

Occidental Petroleum

This top company has one of the highest yielding domestic stocks in the energy sector. Occidental Petroleum Corp. (NYSE: OXY) is an oil-levered multinational organization with principal business segments in oil and gas and in chemicals. The oil and gas segment explores for, develops, produces and markets crude oil and natural gas, primarily in the U.S. Permian Basin, Colombia, Bolivia, Libya, Oman, Qatar and Yemen. The chemicals segment manufactures and markets basic chemicals, vinyls and performance chemicals.

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. The company reported solid earnings and recently raised the dividend. The analysts said this in a recent report:

Occidentals recent dividend increase is a small but significant signal of management’s commitment to its dividend growth strategy. The dividend is covered by cash flow bricks. Permian growth currently funded by asset sales, looks self-funding by end 2018. At $50 oil, the company grows at 5% and fully covers a current 5% yield – the highest of the US oils, with room for growth post 2018.

Shareholders receive a 5.0% dividend. The $70 Merrill Lynch price target compares with a consensus target of $65.47. The stock closed trading Tuesday at $61.53.

Royal Dutch Shell

This company has survived the plunge in oil pricing 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 NGLs.

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.

The company generated 3.83 billion cubic feet per day of natural gas in the second quarter of this year from its integrated gas operations and another 6.40 billion cubic feet per day from its upstream operations. The company posted solid results and the analysts noted this:

Shell has organically covered the total cost of its dividend at $50 barrel over the last month – underlying Free-cash-flow accretion from the BG Group plc takeover last year. With gearing down from 29% to 25% in the first half of 2017 already, the company remains on track to see gearing drop below 20% next year.

Investors receive a 5.63% dividend. The Merrill Lynch price objective is $62. The consensus target is $62.09, and the stock closed Tuesday at $56.80.

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Regardless of how the government deals with Venezuela, energy is one of the few sectors not trading at all-time highs. These four top stocks are solid total return plays for long-term growth and income investors.

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