The energy sector is peppered with a great number of master limited partnerships (MLPs) and royalty trusts that offer outstanding returns to investors seeking income. Unfortunately, the MLPs may not be appropriate for all accounts from a tax perspective, and the trusts are a deteriorating asset whose value erodes as the oil and/or gas on their properties is extracted.
There are, however, a number of large-cap oil and gas common stocks that pay significant dividends and trade with very reasonable price/earnings ratios - not to mention having very reasonable performance records over the last year. And while the price of crude oil, as represented by the United States Oil Fund ETF (NYSE:USO), may be down over 6% this last quarter (it set its 52-week highs in April of this year), shares in these foreign-based energy stocks have bucked the trend and are headed higher.

Here are three of the best issues available from this select group.

IN PICTURES: 5 Tips To Reading The Balance Sheet

Don't Cry for Me, Poor Investor
YPF SA (NYSE:YPF) is an Argentina-based integrated oil company with a market cap of $15 billion, with stocks trading at a price/earnings ratio of 11.26, and it pays a very healthy 7.0% annual dividend. The stock is up an impressive 13.1% in the last three months, against a return of just 4.3% from the widely held iShares S&P Global Energy Sector ETF (NYSE:IXC).

Fitch Ratings Agency recently confirmed YPF's debt ratings at BB-/AAA, citing the company's strong internal cash flow and its dominant position in the Argentinian energy market. (To learn more, see A Brief History Of Credit Rating Agencies)

Italian and French Oil: Any Takers?
Stock in Italy's premier integrated oil and gas company, Eni S.p.A. (NYSE:E) has performed very well in the last quarter, climbing over 12% while paying a very healthy 6.5% annual dividend. The company trades with a P/E ratio of 9.97. Price to sales and price to book are also very attractive, coming in at 0.69 and 1.17 respectively.

Eni is one of the world's largest energy outfits, with a market capitalization in excess of $82 billion. Latest earnings were up 80% from the year earlier period.

Total S.A. (NYSE:TOT), the French oil behemoth, yields 5.7% annually and trades with a P/E of 8.9. The stock is up 6.8% in the last three months.

The Wrap
Foreign oils are now offering great fundamentals and strong yields to the value-conscious, and exceptional recent gains against a relatively weak crude price.

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