Energy was the second-best-performing sector of the S & P 500 last week, as investors flocked back into the stocks amid a recent dip in oil prices. Despite last week’s rebound, the sector is still down about 5% in the past month, however, and oil prices are hovering near their Dec. 2021 lows. So is now the time to buy the dip on selected names? Fund manager Rob Thummel believes companies with a lot of free cash flow and which pay high dividends could look “compelling” to investors. One of his top picks is oil giant Chevron , a company he described as having an attractive dividend yield. The company is growing oil production in the Permian Basin in southwest United States, and will “lead the way” in meeting growing global energy demand and decarbonization needs, according to the senior portfolio manager at Tortoise Capital. Thummel also likes two energy infrastructure stocks — Cheniere Energy and Energy Transfer . Cheniere is generating a lot of cash in the short term and will continue to do so in the longer term due to its decades-long contracted cash flow, he said. Moreover, the stock has more than 10% free cash flow yield and the company has an “aggressive” stock buyback program, he added. Thummel said Energy Transfer also has “significant” free cash flow and a dividend yield of more than 10%. The fund manager is focused on the longer-term fundamentals of oil markets. “There has been under-investment in oil markets. We are bullish on oil prices for that reason … [it’s] just going to make it difficult for supply to keep up over the longer term and in the next several years as well,” he told CNBC’s Squawk Box Asia on Monday. Thummel sees global oil demand hitting a record high in 2023, with oil prices rebounding to a range of between $80 to $90 a barrel by the end of the year — even if a recession strikes. A different way to play oil Fund manager James Davolos has a different way to play the energy sector. He likes Viper Energy Partners , which owns a royalty portfolio of oilfield assets. Royalty companies typically provide funding for mining or exploration projects in exchange for a cut of production revenues or a contracted quantity of the commodity. “Viper Energy has one of the largest backlogs of tier-one locations in the [Permian] basin. And their parent company Diamondback [Energy] is probably the best, if not one of the best, independent operators. So, you basically have an operator that’s self-funding production at the highest quality acreage and sponsoring the growth of your royalty cash flow,” Davolos, portfolio manager at Horizon Kinetics, wrote in notes to CNBC on Monday. This implies that while Diamondback’s economic breakeven may be around $50 to $55 a barrel, Viper Energy’s breakeven is in the “low, single digits” as it needs only to cover the administrative costs of the royalties, he added. Viper Energy is thus able to leverage improving energy prices while having “strong” downside support, according to Davolos. Goldman and Morgan Stanley’s energy picks A host of investment banks have also shared their top energy picks recently. Goldman Sachs favors Exxon as a defensive play , as well as Enterprise Products Partners within the midstream sector, which comprises companies involved in the processing and storing of oil and gas. Meanwhile, Morgan Stanley upgraded the shares of French energy firm TotalEnergies to “overweight” last week, citing “significant” growth potential, its strong balance sheet and an “ambitious strategy” for the energy transition. — CNBC’s Weizhen Tan contributed to reporting.