The Seadrill 3 oil rig in Singapore © LUIS ENRIQUE ASCUI, Newscom, Reuters

Compiled from StockScouter ratings by Verus Analytics

Escalating global tensions and new legislation in the U.S. could fuel gains in the shares of some energy producers.

As violence in the Ukraine has heightened between Ukrainian troops and pro-Russian rebels, the United States this past week issued sanctions against Russia's largest oil company, Rosneft, and its second-largest natural gas producer, Novatek. While Russia indicated there would be no disruptions to production, it still rattled energy markets: Rosneft by itself accounts for 4 percent of the world's oil supply, according to the Associated Press.

And that was before a Malaysian Airlines passenger jet was shot down over Ukrainian airspace Thursday, killing all 298 people on board. While it’s not yet known who shot down the plane, the White House said Friday it believes Russian-backed separatists in Ukraine were responsible, and called for a ceasefire in the region.  

Meanwhile, the Obama administration has opened up the Eastern Seaboard to oil and gas exploration for the first time in decades.

In the wake of these developments, StockScouter's latest list of 10 recommended stocks is gushing with energy producers to suit all types of investors. There's Seadrill (SDRL), an offshore driller that spews an enormous 10.5 percent yield. Ultra Petroleum (UPL) is a natural gas giant that has been making inroads in the oil industry. There's Big Oil dividend stalwart Conoco Phillips (COP). And for bargain buyers, small-cap Hercules Offshore (HERO) trades for just $4, though it is currently unprofitable.

SeaDrill and Ultra Petroleum both get a '10' from the StockScouter rating system on MSN Money, the highest score possible. Based on StockScouter's analysis, shares of SDRL and UPL are both expected to significantly outperform the market over the next six months with average risk or lower.

Read the full Scouter reports on Seadrill and Ultra Petroleum here.

StockScouter Top 10 for July 18

Company

Sector

Dividend yield

Forward P/E

Scouter score

Seadrill Ltd (SDRL)

Offshore drilling

10.5%

10.5

10

Ultra Petroleum (UPL)

Oil and gas

NA

7.010

ConocoPhillips (COP)

Oil and gas

3.4%

13.0

9

AT&T (T)

Telecommunications5.1%13.09

Hercules Offshore (HERO)

Offshore drillingNA6.69

Kodiak Oil & Gas (KOG)

Oil and gas

NA

20.1

9

Verizon (VZ)

Telecommunications

4.2%

13.4

9

Excelon (EXC)

Utilities

3.9%

13.3

8

Apple (AAPL)

Consumer electronics

2.0%

13.5

10

Activision Blizzard (ATVI)

Video games

0.9%

16.3

10

StockScouter beats the market

We think the StockScouter rating system developed by Verus Analytics for MSN Money is one of the best tools you can use when you're trying to decide where to invest.

StockScouter looks for stocks whose business fundamentals, price behavior, valuation and stock-ownership characteristics appear to predict a rising price in the future, based on how those factors have influenced stock prices in the past.

The system assigns each stock an expected six-month return and balances that return against the stock's expected volatility.

Scouter rates stocks on a scale of 1 to 10, and ratings can change daily. Ratings and data in the chart above were current as of this article's publication date.

Click here to become a fan of MSN Money on Facebook

In addition to the daily top 10 list described above, StockScouter is used by investment research firm Verus Analytics (previously known as the quantitative business unit of Gradient Analytics) to generate a monthly benchmark portfolio of stocks that, refreshed monthly, has outperformed the market since its inception in August 2001.

An investor who began in 2001 by investing in each of the benchmark portfolio's top 10 stocks at the start of the month, selling them at the end of the month and then starting fresh with a new group of 10 stocks, would have generated returns, before trading costs and taxes, of 1,084 percent through June 30, 2014.

Writer Jon Markman, at the time a columnist for MSN Money, collaborated with company researchers on the tool.

Markman suggested rolling over the top 10 stocks every six months to hold down trading costs, a strategy that might be a better fit for most investors; that would yield different results, which would vary based on your starting point.

Performance through June 30, 2014

Full 50 position portfolio    

Index

1 month

3 month

6 month

1 year

Since
inception

Average
annual
return

Portfolio

3.9%

3.5%

5.7%

24.9%

617.5%

16.9%

Nasdaq

3.9%

5.0%

5.5%

29.5%

117.5%

8.1%

S&P 500

1.9%

4.7%

6.1%

22.0%

61.8%

4.9%

DJIA

0.7%

2.3%

1.5%

12.9%

59.9%

4.7%

Top 10 portfolio

Index

1 month

3 month

6 month

1 year

Since
inception

Average
annual return

Portfolio

2.3%

1.3%

3.9%

19.4%

1,084.2%

20.9%

Nasdaq

3.9%

5.0%

5.5%

29.5%

117.5%

8.1%

S&P 500

1.9%

4.7%

6.1%

22.0%

61.8%

4.9%

DJIA

0.7%

2.2%

1.5%

12.9%

59.9%

4.7%

Inception: August 2001