We’ve long considered Conservative Portfolio stalwart Chevron Corp (NYSE: CVX) the foundation of any energy-focused investment portfolio for its defensive-growth qualities and solid dividend yield. With the upcoming US presidential election increasing the likelihood that the stock market will pull back in the back half of the year, investors should consider taking some profits off the table in names that trade above our buy targets.

At these levels, shares of Chevron appear overbought. However, investors should consider a position in France-based Total (Paris: FP, NYSE: TOT), which has a credible plan in place to grow its annual production at a steady rate in coming years. The stock yields 6 percent and trades at a significant discount to its peers, largely because of overblown concerns about neatural gas and condensate leaking from one of its platforms in the UK portion of the North Sea.  

In This Issue

The Stories

1. Shares of the major integrated oil companies are often prized for their resilience and solid dividend yields. Investors should focus on names that can replace reserves and grow production at an above-average rate. Undervalued names with these characteristics are a winning bet. See Big Opportunities in Big Oil.

2. With all of its expected 2012 production sold under contract and growing midstream exposure in the Marcellus Shale, shares of Penn Virginia Resource Partners LP (NYSE: PVR) offer a great value after an unwarranted selloff. See Down But Not Out.

The Stocks

Total (Paris: FP, NYSE: TOT)–Buy < USD57 in Conservative Portfolio
Chevron Corp (NYSE: CVX)–Buy < 105 in Conservative Portfolio
Eni (Milan: ENI, NYSE: E)–Buy < USD52 in Conservative Portfolio
Penn Virginia Resource Partners LP (NYSE: PVR)–Buy < 29 in Conservative Portfolio