The past few months have been rough for the oil super-majors, including industry titans Chevron (CVX 0.75%), ExxonMobil (XOM -0.09%), and Royal Dutch Shell (RDS.B). A combination of factors, including weak refining results and restrained production growth, lead many analysts to believe the current quarter will be just as rough as the second quarter.

Despite their reputations as best-in-breed oil stocks, should investors now view the industry negatively and avoid the sector as a result?

Profits are no longer gushing
Indeed, last quarter's results were bad enough to give any investor pause. Chevron posted a bigger-than-expected 26% drop in quarterly profit. While that much of a drop is certainly hard to swallow, it's worth noting that Chevron held up measurably better in the second quarter than either ExxonMobil or Royal Dutch Shell.

Royal Dutch Shell's second quarter results were adversely affected by a massive charge related to its shale oil fields in North America. These losses more than likely stem from the fact that Royal Dutch Shell arrived late to the U.S. shale party which is evident in its recent decision to shed its Eagle Ford assets. Furthermore, Shell also scrapped its long-term production targets, and all told, its second-quarter net profit fell 57%.

These results mirrored those of ExxonMobil, whose second-quarter net income also fell 57% year over year. Exxon's struggles were due largely to under-performance from its natural gas operations, which it has invested heavily in over the past few years, in addition to poor refining results.

Chevron recently released its interim third-quarter status, and the results certainly back up the assumption that weak refining will continue to serve as a drag. Earnings on a quarter-over-quarter basis are expected to decline. Furthermore, overall production of oil and gas in the United States is going in the wrong direction, which only makes the third quarter that much more challenging. Average U.S. oil-equivalent production of oil and gas fell in July and August to an average of 651,000 per day, down from 659,000 per day averaged during the second quarter.

That being said, Chevron investors have no reason to panic. While production in the United States will likely disappoint, total global production is actually expected to increase. Several projects across the globe picked up momentum through the first two months of the third quarter, which resulted in Chevron producing 2.59 million barrels per day in July and August, up from 2.58 million barrels per day in the second quarter.

In conclusion: Buy Chevron on dips
Shares of Chevron declined in after-hours trading upon the release of the company's interim update. However, Foolish investors should view any significant decline in Chevron stock as a great opportunity to buy, what is very much, a high-quality company. That's because Chevron is a conservatively run company with a strong balance sheet. Chevron carries just a 12% net debt ratio, meaning it's got a fortress balance sheet that can withstand even the most difficult operating environments. And, even better, Chevron is one of the most shareholder-friendly stocks out there.

Earlier this year, Chevron increased its dividend by 11%, representing the 26th consecutive year of a dividend boost. At recent prices, Chevron yields 3.5%, above Exxon's 2.9% yield. It's worth noting that Royal Dutch Shell carries one of the highest yields in the sector, at 5.4% annualized. But, a consequence of a higher dividend yield is often lower dividend growth, since a company distributing a larger portion of its profits to shareholders inevitably has less room to further expand its payout. That holds true with Royal Dutch Shell, whose last dividend increase was just 4.6%. Moreover, Royal Dutch Shell has only increased its dividend twice in the past four years.

To summarize, Chevron provides a great mix of current yield as well as dividend growth, in addition to a well-capitalized balance sheet. The current unfavorable refining environment is likely to subside sooner or later, and as a result, investors should embrace any dip in Chevron's share price and look to opportunistically buy this world-class energy company.

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