French oil giant

Total S.A.

(TOT) - Get Report

looks good to me on many levels. I'm worried about the U.S. dollar, future inflation and having enough spending money. TOT is near perfect on all three counts.

Not only do you get a triple play, but it's available at a very reasonable price. At Monday's close of $51.52, these shares sell for about 8.3x 2010 earnings and less than 7.7x the 2011 estimates. Those multiples are among the lowest ever for this fine company. TOT's 10-year median P/E has been 11x.

Its yield varies with exchange rates and oil pricing, but this year's distributions totaled $2.94 per share for a rate of 5.7% of the current price. While the P/E is near the lowest ever, the current yield is among the best in history for TOT shareholders.

Total S.A. (TOT) EPS

Source: Value Line

View Chart

What are TOT shares really worth?

Value Line

uses a 10 multiple in calculating its three to five-year target price range. That P/E on next year's estimate would bring TOT back to the high $60s-low $70s. Standard & Poor's seems to agree with a 12-month goal of $67.00 per share.

Common sense and TOT's actual trading history suggest those are quite achievable. Annual highs of $66.00-$91.00 have been touched during each of the past six years including 2010.

These are high-quality shares. Check out Value Line's rankings for various attributes...

I'm a buyer of shares and a seller of puts out to 2012 and 2013. Here are some that look good to me right now.

All those puts provide good downside protection while allowing for substantial profits if TOT rises as expected.

Trades: Buy 100 TOT for $51.52 per share, sell to open 1 TOT January 2012 55 put at $9.40, sell to open 1 TOT January 2013 55 put at $11.50 and sell to open 1 TOT January 2013 60 put at $16.10.

At the time of publication, Paul Price was long TOT shares and short TOT puts.

Dr. Price joined Merrill Lynch in 1987 and over the next 13 years worked with A.G. Edwards, Wheat First and Ferris, Baker Watts. Dr. Price enjoyed enough success to retire in October 2000, but he continues to write and give investment seminars.

OptionsProfits For actionable options trade ideas from a team of experts, visit TheStreet's OptionsProfits now.

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