Commodity stocks last year posted a nearly 9 percent decline—their worst performance in 15 years, largely thanks to the weakness of their underlying materials.

By contrast, the S&P 500 racked up a record run in 2013, finishing the year with a total return of roughly 30 percent. That marks the S&P 500’s largest percentage gain since 1997 and put the index at an all-time high.

Several factors contributed to the huge performance gap between the two asset classes.

One of the biggest drawbacks for commodity prices has been China. Last year, the country’s economy grew by 7.7 percent. Although one of the strongest performances globally, China’s growth was in sharp contrast to its double-digit gain before the 2008 financial crisis. At the same time, the Chinese government continues to work towards a transition from an export-based economy to one more focused on consumer spending, creating more worry about slack in global materials demand.

China has also seen its pace of investment growth slow, particularly as its central bank tightened credit towards the end of last year to curtail the country’s debt burden.

Meanwhile, investors have been lured away from the commodity market.

Bond yields rose slightly in 2013, but they didn’t finish the year that far off their record lows. That inevitably pushed more money into the equity markets to generate enough current yield to drive portfolio returns. Thanks to that dynamic, numerous investor surveys have shown that equity allocations have reached some of their highest levels in recent memory.

But after last year’s eye popping returns on most developed market equities and the drubbing that commodities took, it is simply unrealistic to expect those performances to continue the same paths this year.

China’s economy has shown signs of stabilizing, with industry output readings generally favorable over the past few months. Inflation has also been tamed to a large extent, as the central bank tightens the screws on the country’s credit market, even as both import and export data have been better than expected.

There are also signs that the developed world is finally beginning a self-sustaining recovery. The World Bank recently hiked its global gross domestic product growth forecast for this year from 3 percent six months ago to 3.2 percent, as the US and Europe continue to show improvement. The International Monetary Fund has also become more optimistic, boosting its forecast from 3.6 percent to 3.7 percent earlier this month.

These more sanguine global growth projections are fostering an improving outlook for commodity stocks.

Analysts are predicting that earnings of materials companies in the S&P 500 will grow by 18 percent this year versus only 10.6 percent growth for the index constituents as a whole. The average price-to-earnings ratio of materials stocks has also been widening, up 16 percent over the past six months.

Moreover, the situation wasn’t all bad going coming into this year.

Natural gas prices in the US gained more than 30 percent over the course of 2013. Natural gas this year has already broken the mark of $5.00 per million British thermal units, the highest price level since 2010, thanks to bone-chilling weather across much of the country. That’s left many investors questioning the earlier forecast for a warmer than average winter, with some now betting that natural gas storage levels will scrape a six-year low in the coming months.

The Top Two

Within this context, here’s our top commodity play for 2014: Cimarex Energy (NYSE: XEC). Our sole US-based portfolio holding, Cimarex is up 53 percent from our initial buy recommendation last year.

The company won’t report fourth quarter or full-year earnings for another two weeks but, since we added it to our portfolio in May, it has shown strong operational performance.

In the third quarter, the company’s revenue from the sale of oil, natural gas and natural gas liquids shot up to $549.6 million from $397.4 million in the same period last year. That was driven largely by a 13 percent year-over-year increase in production volume, which hit a record 716.8 million cubic feet equivalent (mmcfe).

Oil accounted for a third of the company’s overall production in the quarter and accounted for 68 percent of revenue, while natural gas made up 48 percent of production and liquids contributed 19 percent. Natural gas contributed 21 percent of revenue while liquids accounted for 11 percent.

The company plans to invest about $1.8 billion in exploration and production this year, which will continue to drive growth in 2014. As part of its long-term capital expenditure plan, it will sink $1.4 billion in its Permian Region operations in 2014, up 40 percent versus last year. About $1.2 billion of that will be devoted to drilling and completing wells, taking its rig count in the region from 12 to 16.

Management expects this investment to expand production to an average of 760 million to 800 mmcfe this year. That’s 13 percent higher than last year, with management forecasting daily production of between 714 – 735 mmcfe in the fourth quarter. That brings full-year guidance to between 695 – 700 mmcfe in daily production. Assuming prices continue to firm, with $4.13 in earnings per share (EPS) already booked so far this year, Cimarex should beat the median analyst estimate of $5.59 in EPS for the full year.

Continue buying Cimarex Energy up to 110.

Freeport McMoRan Cooper & Gold (NYSE: FCX) was also one of our top commodity performers last year, returning 18.6 percent over the course of 2013.

The company reported fourth-quarter earnings of $707 million (or $0.68 in EPS) last week, down from the $743 million posted in the prior year.

But copper sales rose 17 percent versus last year to 1.14 billion pounds, helping to offset an 8 percent decline in prices over the past year. Gold sales were up from 254,000 ounces in 2012 to 512,000 ounces.

Expenses also showed a marked decline, as the average cost per pound of copper fell from $1.54 last year to $1.16, and the average cost of gold fell 26 percent to $1,273.43 per ounce.

But there is an overhang on Freeport McMoRan shares, as the company continues to wait for export approvals from the Indonesian government. The company’s flagship Grasberg mine is located in Indonesia and it is the company’s largest producer by revenue.

The Indonesian government began phasing in new commodity export regulations on January 1, including a 25 percent tax on semi-processed copper ore. Under Freeport’s original contract of work when it first began developing the Grasberg mine decades ago, the company should be exempt from the new taxes. Until the conflict is resolved and export permits are issued, the company is deferring about 40 million pounds of copper and 80,000 ounces of gold production a month at the facility.

Freeport believes an agreement will be reached and most analysts concur with that assessment, with the Indonesian government covertly seeking a tactful way to back down. Freeport is no stranger to these sorts of conflicts with the Indonesian government and they have always been resolved favorably in years past.

At the same time, the company intends to shift its earnings and production mix by focusing on less challenging areas. It is aiming to produce more than 50 percent of its earnings in North America this year, taking Indonesia down to just 24 percent of the mix. It also hopes to increase the contribution of oil and gas to more than 25 percent.

Overall, Freeport expects to sell 4.4 billion pounds of copper and 1.7 million ounces of gold for this year, as it continues to review its assets for potential dispositions. It is also working to reduce its net debt to $12 billion by the end of next year.

Freeport McMoRan Copper & Gold remains a buy up to 42.