TOTAL S.A. ( TOT - Analyst Report ) , the large French oil company, is exploring in areas of the world where oil reserves are growing. Full year estimates are jumping as crude prices rise. TOT trades at only 9x forward earnings.

Company Description

TOTAL is a large integrated oil and gas company. Headquartered in France, the company is among the top 5 largest diversified energy companies in the world. TOTAL operates in exploration and production, refining and marketing and has a chemical business.

TOTAL operates a significant part of its production business in regions such as Kazakhstan, Qatar, Canada and West Africa.

First Quarter Results

On May 6, TOTAL reported first-quarter 2009 results that reflected the 54% drop in Brent crude prices since the first quarter of the previous year and significantly lower natural gas prices.

Additionally, production also fell as OPEC pulled back on production and the world entered a global recession.

Sales fell 32% year over year. The exploration and production segment (the upstream business) fell 46%. The refining and marketing segment (the downstream business) grew 93%.

Net income declined by 35% compared to a year ago.

2009 Outlook Brightens

With the not-so-great first quarter, then why is TOTAL a Zacks #1 Rank (strong buy) stock?

Crude prices have rebounded since the first quarter and earnings estimates are rising both for the second quarter and the full year.

In the last month, 1 out of 2 covering analysts raised for the second quarter by 17 cents to $1.30 per share.

Full-year estimates jumped 9.28% in the last 30 days to $5.65 from $5.17 per share with 3 out of 6 covering analysts raising during that time.

Value Fundamentals

TOTAL is trading with an attractive price-to-book of 1.64. The company has an outstanding 5-year average return on equity of 31.87%.

As an added bonus, the company also pays a dividend with a current yield of 5.20% which is much higher than the industry average of 2.63%.