With oil prices up 75% since earlier in the year, the sector is obviously starting to garner more attention. In fact, some strategists are starting to lift their S&P 500 earnings estimates for 2016 as the price of crude drifts steadily higher. And not only are the estimates going higher for this year, they could really jump in 2017 if the price could surge up to the $60 level, which many feel is starting to look very possible.

One of the firms we cover here at 24/7 Wall St. is UBS, which is cautiously positive on the overall sector. The analysts have the sector rated Moderate Overweight, and their preferred subsectors are exploration and production and oil services, which they believe will benefit most from the recovery in oil prices. They have four stocks on the list that are the equity preference members that pay solid dividends.

Chevron

This stock is very solid story for investors looking to stay long the energy sector, and it is a preferred U.S. company to own now. Chevron Corp. (NYSE: CVX) is an integrated oil and gas company with worldwide operations in exploration and production, refining and marketing, transportation and petrochemicals. It 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, and the stock trades at a modest valuation discount to some of its mega-cap peers.

The company’s Permian Basin assets are a goldmine, and that the Australian LNG business will transition from a yearly $8 billion capital consumption drag to a $2 billion to $3 billion contributor. Combined with the much lower overall capital spending for the 2016 to 2018 period, the company is poised to not only hang around, but end the sector slump in a much better position.

Chevron investors receive a massive 4.25% dividend. The Thomson/First Call consensus price target for the stock is $103.32. Shares closed trading on Tuesday at $100.73.

Exxon Mobil

This company remains one of Wall Street’s top picks for 2016. Exxon Mobil Corp. (NYSE: XOM) explores for and produces crude oil and natural gas in the United States and globally. 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. As of December 31, 2015, the company had approximately 35,909 gross and 30,114 net operated wells.

The company’s global downstream chemical segment plays a huge part for Exxon. It may be a part that many on Wall Street don’t fully appreciate as the segment contributes an estimated 16% of overall total revenue. Some 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 investors are paid a 3.35% dividend. Though the consensus price objective is set at $84.93, shares closed above that level on Tuesday at $89.53.
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. Its 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.

While the company reported a first-quarter 2016 loss that was wider than the consensus forecast, Occidental did report total revenue that beating the Wall Street estimates. 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% from 2015 expenditures.

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.

Shareholders are paid a solid 3.93% dividend. The consensus price target for the stock is $77.28. Shares closed just south of there on Tuesday at $76.33.

Schlumberger

This top oil services company makes the most preferred list. Schlumberger Ltd. (NYSE: SLB) remains the largest oilfield services company in the world for now, with far-reaching operations all around the globe, and it could be poised for years of solid growth despite the huge turn down in oil pricing. Top Wall Street analysts think the company will continue to drive margins on execution, technologies and efficiencies. Russia, Saudi Arabia, Iraq and China are expected by some to be the strongest markets, if geopolitical concerns remain somewhat in check.

The company reported solid first-quarter earnings and revenues come in slightly above Wall Street estimates. Recent reports have indicated the company may be looking to buy back its former Iranian unit. The report also noted that Schlumberger sold Well Services of Iran to Nima Energy, a Hong-Kong based holding company, when it left Iran and the sales-agreement reportedly included a provision that could give the oil services giant “first right to buy back the company when sanctions were lifted,” per Dow Jones news.

Schlumberger investors receive a solid 2.67% dividend. The consensus price target is set at $87.74. The stock closed most recently at $74.88 per share.

While the rally off the February lows for the spot price has been solid, many analysts are still keeping with more conservative large cap sector leaders. This makes sense for investors looking to add some oil exposure to their portfolios.

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