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Top Sectors of 2011: Energy, Industrials

BOSTON ( TheStreet) -- It's been energy -- and more energy -- this year when it comes to investing. Given the strife in the Middle East, that's likely to continue.

But safe, secure, stable is what you want here.

Even before the Middle East's political blowups, Standard & Poor's said "with their solid dividend yields and huge businesses diversified internationally, we look for the equity values of U.S.-based super-major oil and gas companies to rise alongside our forecasts for improved global economic growth and crude oil prices."

The oil patch returned an average 12% so far this year, versus the S&P 500 Index's 4.6% gain, besting all other sectors by about double.

In second place is the industrials sector with a 6.3% return, according to Fidelity Investments research data.

Other sector returns were: information technology at 5.6%, consumer discretionary, 4.3%, financials, 4.3%, health care, 2.3%, materials, 1.1%, utilities, 0.9%, consumer staples, 0.4%. The only loser in the bunch was telecommunications services, with a decline of 3%.

It's important to note that money is flowing back into the U.S. seeking stable, reliable companies. Mutual-fund-flows tracking firm EPFR Global reported Friday that $47 billion poured into developed markets, and the second week of February saw the biggest inflows into those markets in more than 30 months coming out of emerging markets stocks.

As for the energy sector, companies' share-price returns are only going to get better because of the latest Middle East turmoil, the latest in Libya. Oil prices are over $100 a barrel, the highest since 2008, and may be going higher.

So any oil or natural gas provider with a North American base has an advantage. That's because protests in Libya, Africa's third-largest oil producer, are the first to meaningfully put oil supplies at risk, Goldman Sachs said in a research report Tuesday.

Goldman, which is forecasting benchmark crude to rise to $103 within 12 months, said recent violent protests in Bahrain show that wealthy oil-rich Gulf states are also vulnerable to political upheaval.

As an investor, that means you want oil companies with exposure to politically stable regions, whether that's oil shale in Canada, offshore of the Gulf of Mexico or in Asia.

On the following pages are large, stable energy companies poised to do well this year, according to investors and analysts.
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