Even though global oil output was at a staggering 100 million barrels per day in August, the fact of the matter is that supplies could become severely disrupted this fall as sanctions on Iran are tightened and the fallout from a huge drop in Venezuelan output is felt. The good news for investors is that some of the biggest and best oil stocks are still incredibly cheap compared to the rest of the market.

A recent report from the International Energy Agency noted a surge in supply from OPEC members but said overall world supply is tightening up and “We are entering a very crucial period for the oil market.”

We screened the Merrill Lynch energy research database looking for stocks rated Buy that pay good dividends and had solid upside to the firm’s price targets. We found four that look like outstanding picks for growth investors looking for total return.

Enterprise Products Partners

This is a leading North American provider of midstream energy services to producers and consumers. Enterprise Products Partners L.P. (NYSE: EPD) is the largest publicly traded master limited partnership (MLP), and its midstream energy services include gathering, processing, transportation and storage of natural gas, natural gas liquids fractionation, import and export terminaling, and offshore production platform services.

One reason why many analysts may like the stock might be its distribution coverage ratio. That ratio is well above one-times, making it relatively less risky among its peers. The company’s distributions have grown for several quarters, and last year Enterprise Products announced that the board of directors of its general partner declared an increase in the quarterly cash distribution paid to partners to $0.43 per common unit, or $1.72 per unit on an annualized basis.

Investors are paid a 5.92% distribution. The Merrill Lynch price target for the stock is $31 and the Wall Street consensus target is $33.50. Shares traded early Friday at $29.09.

Exxon Mobil

This remains a top energy pick and is on the US 1 list at Merrill Lynch. Exxon Mobil Corp. (NYSE: XOM) is the world’s largest international integrated oil and gas company. It explores for and produces crude oil and natural gas in the United States, Canada, South America, Europe, Africa and elsewhere.

The company also manufactures and markets commodity petrochemicals, including olefins, aromatics, polyethylene and polypropylene plastics, and specialty products, and it transports and sells crude oil, natural gas and petroleum products.

Exxon reported quarterly profits that fell short of analysts’ expectations, marking the fourth time in the past five periods the company has disappointed. The miss was largely due to weaker earnings in Exxon’s refining and marketing segment due to heavier-than-anticipated maintenance and operational problems. Exxon’s business producing oil and gas bolstered earnings, with the company saying it is favoring oil output over gas drilling in its U.S. shale fields.

Investors are paid a solid 3.98% dividend. Merrill Lynch has a price objective of $110, while the posted consensus target is $88.88. The shares traded at $82.58 Friday morning.

Occidental Petroleum

This is one of the highest yielding domestic stocks in the energy sector. Occidental Petroleum Corp. (NYSE: OXY) is an oil-levered multinational organization with principal business segments in oil and gas and in chemicals. The oil and gas segment explores for, develops, produces and markets crude oil and natural gas, primarily in the U.S. Permian Basin, Colombia, Bolivia, Libya, Oman, Qatar and Yemen. The chemicals segment manufactures and markets basic chemicals, vinyls and performance chemicals.

With a rock-solid balance sheet and a commitment to dividend coverage, investors look safe for now. Occidental has paid quarterly cash dividends continuously since 1975, and it has increased its dividend each year since 2002.

Top Wall Street analysts believe that the company’s firm transportation commitments leave it well positioned to reap the benefits of what could be a prolonged wide differential between Midland and U.S. Gulf Coast crude prices. Occidental has firm transportation commitments of 470,000 barrels per day from Midland to the Gulf Coast, about 19.5% of total capacity, which provides full flow assurance on its own Permian production as well as arbitrage opportunity on third-party volumes.

Shareholders receive a 4.07% dividend. The $105 Merrill Lynch price target compares with a $96.57 consensus target and a share price last seen at $77.20.

Royal Dutch Shell

This company has survived the seesaw in oil pricing as good as or better than any other major integrated. Royal Dutch Shell PLC (NYSE: RDS-A) operates as an independent oil and gas company worldwide through its Upstream and Downstream segments. The company explores for and extracts crude oil, natural gas and natural gas liquids.

Royal Dutch Shell also converts natural gas to liquids to provide fuels and other products; markets and trades crude oil and natural gas; transports oil; liquefies and transports gas; extracts bitumen from mined oil sands and converts it to synthetic crude oil; and generates electricity from wind energy.

In addition, the company engages in the conversion of crude oil into a range of refined products, including gasoline, diesel, heating oil, aviation fuel, marine fuel, liquefied natural gas for transport, lubricants, bitumen and sulphur; production and sale of petrochemicals for industrial customers; refining; trading and supply; pipelines and marketing; and alternative energy businesses.

Royal Dutch Shell recently announced the start of a $25 billion stock buyback program, and while second-quarter earnings were somewhat weak, free cash flow at the integrated giant remains strong.

The Wall Street consensus estimate is $81.01, and the stock traded at $64.88.

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With oil hovering just under $70 level, you can bet that the big integrateds are looking to produce and sell as much as possible, especially while the sanctions on Iran are finally totally put in place. These stocks are outstanding long-term buys for growth portfolios looking for income as well.

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