As we have reported recently, with earnings coming out full blast the top firms we cover on Wall Street are getting their initial glimpse at first-quarter results, and they are also getting a look at how things are shaping up for the second quarter and the rest of 2017. One thing seems obvious, many of the top firms favor the energy sector, as the backup in oil prices combined with solid demand and geopolitical concerns make it a smart place to be in an overall expensive stock market.

In a new research report, Stifel makes some big changes to the firm’s Select List portfolio, which is a collection of the highest conviction stock selections from the analysts. They add eight new companies, and four are very hot energy stocks. All are rated Buy at Stifel.

Cabot Oil and Gas

With many expecting a very hot summer, this top natural gas play could be a timely pick. Cabot Oil & Gas Corp. (NYSE: COG) produces mostly natural gas in the United States, with operations primarily in Appalachia and an ancillary position Eagle Ford. The company has lined up very high-quality growth assets in the Marcellus Shales and is aggressively moving to develop these fields. Production and reserves are 96% natural gas.

U.S. energy firms are scrambling to finish a slew of pipelines that will unleash rich reserves of shale gas in Pennsylvania, West Virginia and Ohio as the nation prepares to become one of the world’s top natural gas exporters. Cabot figures to be a big player in this evolution and offers solid value and current trading levels.

Shareholders receive a 0.33% dividend. The Stifel price target for the stock is $30, and the Wall Street consensus target is $29.34. Shares closed Tuesday at $24.11.

Cimarex Energy

This is a top play for investors looking to the Permian Basin. Cimarex Energy Co. (NYSE: XEC) is an independent exploration and production company. Its primary activities are in the Mid-Continent and Permian Basin areas of the United States. The company is focused on increasing shareholder value through strategies linked to generating attractive economic returns on capital employed and profitable growth in per-share reserves, production and cash flow. It intends to profitably grow reserves and production through a balanced mix of exploration, exploitation and acquisitions.

Cimarex has a diversified base of high-quality production and attractive drilling opportunities. It should be noted that hedge funds have initiated sizable new positions in the company over the past year, and like its brethren in the Permian, many consider the company a very solid takeover target.

Investors receive a 0.27% dividend. Stifel has a whopping $183 price target. The consensus target is $158, and shares closed most recently at $117.91.

Rice Energy

This company has started to catch some upgrades recently around Wall Street. Rice Energy, Inc. (NYSE: RICE) is an independent natural gas and oil company, engaged in the acquisition, exploration, and development of natural gas, oil, and natural gas liquid (NGL) properties in the Appalachian Basin.

The company conducts its operations through two segments. The Exploration and Production segment is engaged in the acquisition, exploration and development of natural gas, oil and NGLs. It operates in the cores of the Marcellus and Utica Shales. The company controls approximately 231,000 net acres in the Marcellus and Ohio Utica Shale cores. It operates approximately 1,164 drilling locations.

The Midstream segment is engaged in the gathering and compression of natural gas, oil and NGL production of, and in the provision of water services to support the well completion activities of, Rice Energy and third parties.

The $32 Stifel price target compares with the consensus target of $30.20. Shares closed Tuesday at $22.72.

WPX Energy

This smaller cap company has solid upside potential. WPX Energy Inc. (NYSE: WPX) is an independent oil and natural gas exploration and production company focused on unconventional properties in the United States. Its principal areas of operation include the Permian Basin in Texas and New Mexico, the Williston Basin in North Dakota and the San Juan Basin in New Mexico and Colorado.

WPX is a premier Permian-levered operator with sector leading debt-adjusted cash flow growth supported by strong execution in the core Delaware, all while trading at a Williston Basin valuations primarily due to its relatively high financial leverage.

The Stifel price objective is $21. The consensus target is $18.48. Shares closed on Tuesday at $12.77.

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These stocks are trading well below their 52-week highs, and with all the potential catalysts in front of them, they make very solid buys now. Investors may want to buy partial positions and see how first-quarter earnings come out, but owning the top natural gas and Permian Basin companies is one of the best strategies for investors now.

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