Despite their relatively good performance, and West Texas Intermediate (WTI) oil pricing that has remained strong and above $100 per barrel, many investors, especially institutional investors, are underweight the big oil stocks. In a new research report, the energy team at Cowen says that negative earnings-per-share revisions (EPS) are starting to level off. One thing is for sure, and Cowen points this out, if global economic growth starts to gain solid traction, then the big major integrated names could be in for a solid second half of 2014. Throw in some second half catalysts, and performance could really be outstanding.

Chevron Corp. (NYSE: CVX) recently entered in to a large $1.6 billion deal with YPF to continue the development of Argentina’s exciting Vaca Muerta shale oil and gas formation. The partnership is expected to drill as many as 170 additional wells this year. YPF has struggled since being nationalized in 2012, and striking a solid deal like this is huge for the company. Investors receive a solid 3.2% dividend. The Cowen price target for the stock is $133. The Thomson/First Call estimate is at $129.48. Chevron closed Tuesday at $124.

Exxon Mobil Corp. (NYSE: XOM) unit profitability has started to improve, although it is still below Chevron’s. With incremental growth coming from liquids/liquid-linked output, the Cowen analysts expect margin expansion in coming years. Improvement in Henry Hub prices should also help profitability in 2014. Exxon Mobil’s profits fell 27% last year, due mostly to such poor performance in its downstream unit. Therefore, even if oil prices rise significantly and help to boost upstream profitability, Exxon Mobil’s conservative production strategy and huge downstream operations may blunt the positive impacts of higher domestic oil prices. The Cowen team also thinks that capital expenditures for the energy behemoth will start to drop after this year, and that will immediately help overall profitability in the future. The company pays its shareholders a very respectable 2.5% dividend. The Cowen price target is $111, and the consensus is much lower at $99.28. Exxon closed Tuesday at $100.37.

SEE ALSO: Deutsche Bank Raises Price Targets on Top Oil Service Stocks

Occidental Petroleum Corp. (NYSE: OXY) finally rewarded activist investors when it announced that it was spinning off its California assets into a separate company. Occidental has faced calls from Wall Street and activist investors to split its U.S. business from its international operations, with analysts valuing the assets at a range of between $19 billion to $22 billion. The fact that the company is not an integrated is seen as a huge positive. Without refining or midstream operations, independent exploration and production majors like Occidental will see the full benefit of rising oil prices in their future results. Investors receive a very solid 3% dividend. Earnings estimates have turned up for the company before its earnings report, which is early next month, and that is usually a very solid precursor. Cowen has a $107 price target, and the consensus is right in line at $107.10. Occidental closed Tuesday at $96.93.

Total S.A. (NYSE: TOT) recently announced that it will move forward with its plans to develop the Kaombo oil field off of the Angolan coast. This is a giant oil field that is estimated to contain approximately 650 million barrels of oil. Several other companies, including Exxon, also have large interests in this field, which is expected to deliver huge production volume. Total stands to receive 30% of this amount as that is its ownership stake. The company pays investors an outstanding 4.9% dividend. The Cowen price target in U.S. dollars is $77.43, and the consensus is at $63.34. Total closed Tuesday at $68.65.

The combined stock appreciation, with the solid dividends these mega-cap names deliver, can add up to substantial total return for long-term investors. The other solid thing for conservative investors is these major companies can withstand a downturn far better than smaller companies. As Cowen points out in its report, any sort of solid macroeconomic growth around the world and these top names should perform well.

ALSO SEE: Deutsche Bank Identifies Next S&P 500 Candidates

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