Energy was having a tough enough time this year, and things got worse recently for the energy master limited partnerships (MLPs). On March 15, the Federal Energy Regulatory Commission (FERC) ruled that the interstate oil and natural gas pipelines owned by MLPs can no longer avail a credit for income taxes they do not pay. While the outcome is still unknown, and the ruling could change, it was more than enough to bring out the sellers in droves.

The conundrum for investors is, despite consistent $60 per barrel West Texas Intermediate, the segment keeps getting pounded, but it is one of the few that appears to have value. One area that may be the place to put some bets down on is refining, especially with spring here and the busy summer driving season right around the corner.

A new research report from Deutsche Bank acknowledges the slow start to the year the top refining stocks have had, but the firm is optimistic going forward, and here’s why:

Despite the negative revisions, we remain constructive on the outlook in both the second half of 2018 and into 2019-2020, with robust demand, tightening balances, and a production-driven tailwind to US crude differentials.

These four top stocks are rated Buy, one with a huge discount to the sum-of-the-parts value. All make good sense for investors looking to take advantage of the energy sector troubles.

Andeavor

This larger cap refining play could have big upside for the latter half of 2018, and it is one of the top picks at Deutsche Bank. Andeavor (NYSE: ANDV) is an independent refiner and marketer of petroleum products. It operates seven refineries concentrated in the Western United States with throughput capacity of 1.1 million barrels per day.

The company’s retail marketing system sells gasoline and diesel fuel through retail stations, as well as through third-party dealers and distributors. This segment operates a network of 2,492 retail stations under the ARCO, Shell, Exxon, Mobil, USA Gasoline, Rebel, Thrifty and Tesoro brands. The company was formerly known as Tesoro and changed its name to Andeavor in August 2017.

Shareholders receive a 2.4% dividend. The Deutsche Bank price target is a stunning $142. The Wall Street consensus target is $135.53, and shares traded early Tuesday at $100.75.

Delek

This small-cap refining company could bring some outstanding gains for investors with a more aggressive investing portfolio. Delek U.S. Holdings Inc. (NYSE: DK) is an independent U.S. refiner headquartered in Brentwood, Tennessee, with core operating assets located in Tyler, Texas, and El Dorado, Arkansas.

Delek operates three business units (refining, retail, logistics) but derives more than 70% of its operating income from its refining segment, which has approximately 140 million barrels per day of crude throughput capacity. Delek’s product slate is skewed toward the light end, including motor fuels.

Delek investors receive a 2.1% dividend. Deutsche Bank raised its price target to $46 from $43. The consensus target is $43.38, and the stock traded at $38.90 Tuesday morning.

HollyFrontier

This is another smaller cap company that the analysts feel comfortable about now. HollyFrontier Corp. (NYSE: HFC) is an independent refiner that produces various refined products. The company’s operations are organized into two reportable segments: Refining and Holly Energy Partners.

The company owns and operates five refineries in Artesia, New Mexico; Woods Cross, Utah; Tulsa, Oklahoma; Cheyenne, Wyoming; and El Dorado, Kansas. In addition, HollyFrontier owns and operates Holly Asphalt, which manufactures and markets asphalt products, and owns a 32% limited partner interest and 2% general partner interest in Holly Energy Partners.

Shareholders are paid a 2.85% dividend. The $56 Deutsche Bank price objective compares with the $49.33 consensus estimate. The stock was last seen at $47.95.

Marathon Petroleum

This top refiner has been on a nice roll but still has upside to the Deutsche Bank target. Marathon Petroleum Corp. (NYSE: MPC) has a diversified business that operates through Refining & Marketing, Speedway and Pipeline Transportation segments. It owns and operates seven refineries in the Gulf Coast and Midwest regions of the United States, which refine crude oil and other feedstocks. It distributes refined products through barges, terminals and trucks, as well as purchases ethanol and refined products for resale.

Marathon Petroleum decided last year not to spin off its Speedway business, which has 2,730 locations spread across 21 states. Marathon has plans to invest $380 million into Speedway by building new stores and remodeling others.

Marathon shareholders are paid a 2.66% dividend. The Deutsche Bank target price is $93, and the Wall Street consensus is posted at $82.47. The shares closed the day Monday at $69.21.

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Four top energy plays that all pay good dividends and could be on the receiving end of a nice sector tailwind the second half of 2018 and into next year. They all are good additions to growth and income accounts looking for energy exposure.

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