Each of the independent refiners to report second-quarter earnings so far have shown year-over-year declines, reflective of a sluggish demand environment, rapidly compressing crude differentials and escalating renewable identification number (RIN) costs. While the current period again holds difficult year-over-year growth thresholds, the refinery analysts at Cowen and Company see elements for a sequential lift that could indicate a sentiment bottom for the industry. Here are the top refining stocks to buy at Cowen.

Marathon Petroleum Corp. (NYSE: MPC) is a top stock to buy now. The Cowen team is very positive on the company’s mix of midstream cash potential, aggressive cash returns and strong operational performance. Their price target is set at $100. The Thomson/First Call estimate is $86.50. Investors are paid a 2.3% dividend. This may very well be a big winner if Cowen is right. Its price target represents a 23% move from current trading levels.

PBF Energy Inc. (NYSE: PBF) engages in the refining and supply of petroleum products. It provides gasoline, ultra-low-sulfur diesel, heating oil, jet fuel, lubricants, petrochemicals and asphalt, as well as unbranded transportation fuels, heating oil, petrochemical feedstocks and other petroleum products. It also has stated that the rising RIN costs will be passed along to the consumer, which make for bad publicity, but will increase earnings. Cowen keeps PBF as a stock to buy and lowers its price target to $30. The consensus target is at $29.50. Shareholders are paid an outstanding 5.2% dividend.

Tesoro Corp. (NYSE: TSO) beat earnings on both the top and bottom line last Friday. In addition, the $100 million rail-to-barge oil terminal that the company plans to build at a port in Washington would help supply cheaper U.S. and Canadian crude to refineries all along the West Coast — both its own and those run by competitors. Cowen already is moving its 2014 estimates higher to account for the added revenue. Its price target for the stock is $65, while the consensus stands at $65 as well. Investors are paid a 1.2% dividend, which will increase by 25% for the next payment as it was just raised.

Valero Energy Corp. (NYSE: VLO) distinguishes itself from the refining group by its aggressive investments within its refining asset base, including topping plants around its Eagle Ford infrastructure and potential pursuit of a methanol unit at St. Charles. Most of the peer group is investing either only in immediately monetizable infrastructure and logistics assets or returning excess cash, but Valero is leveraging its operation toward its thesis of crude oversupply in the Gulf Coast. It is rated only at Market Perform at Cowen, and the price target for the stock is at $40. The consensus target is higher at $41. Investors receive a 2.4% dividend.

Western Refining Inc. (NYSE: WNR) also beat analysts top and bottom line estimates last week. The company announced that it will pursue a master limited partnership (MLP) spin-off of its logistics assets. The MLP, appropriately named Western Refining Logistics, will trade under the ticker WNRL. The partnership aims to raise $287.5 million in its offering. Cowen has a $38 price target for the stock, and the consensus target is at $36.50. Stockholders are paid a 2.6% dividend.

Cowen’s thesis of staying with the independent refiners makes good sense. Refining issues at some of the large integrateds like Exxon Mobil Corp. (NYSE: XOM) and Chevron Corp. (NYSE: CVX) were a large drag on their earnings this past quarter. The pure-play independents were big momentum stocks in 2012, and with fundamentals improving they may be poised to lead again soon.

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