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As oil bubbles past $100 a barrel, and the stock market still has the potential to be highly volatile, I take a look at large cap oil and gas companies selling at low price to earnings ratios. I selected the following five stocks to their relatively low betas--indicating these stocks will experience less volatility than the market as a whole. Additionally, these stocks all pay dividends, giving investors further protection from downside risk.

Hess Corporation (NYSE:HES) is an energy company, placed on a global platform for the exploration and production of oil and natural gas. The company has market capitalization of $8.08 million, with earnings per share at $5.01 and price earnings of $12.10. At its current market price, Hess Corporation is trading at around 10 times its past earnings, and at approximately 8 times its forward earnings. In my opinion, the stock is selling at a discount, considering its current market rate and when compared to its contemporaries, like Exxon, trading at much higher multiples. From the perspective of an expected boom in the oil and gas sector, the 2012 earnings per share of Hess Corporation is expected to rise by 17%. Considering a more pessimistic scenario, where the earnings per share of Hess Corporation falls to multiples of around 8, the market price of Hess Corporation would still increase by around 12%. I would certainly recommend buying this stock at its current market share, with a fairly long-term perspective.

Exxon Mobil Corporation (NYSE:XOM) is a global player in the oil and gas sector which engages in many activities pertaining to natural gas. Having market capitalization of $401.67 billion, the company has earnings per share of around $67.03, while its price earnings ratio is approximately $10.10. In my opinion, Exxon Mobil Corporation is an undervalued stock. Considering its past performance, a return of around 120% over the last decade which excludes its dividend payout, coupled with a growth of approximately 555%, I would consider the stock to be an optimal buy at its current market price. The book value of Exxon Mobil Corporation, in the last decade, has increased by around 123%. Currently, the company has a free cash flow of around $7.40 billion. Moreover, the company's revenues have risen by around 180%, from its last decade. As Exxon Mobil Corporation also depicts a strong history of dividend payouts coupled with a tendency to buy back stocks, I would consider this stock to be purchased at its current levels, with a long-term horizon.

Noble Energy, Inc. (NYSE:NBL) is an independent company engaged in the energy sector. With an price to earnings ratio of around 23.60, the company's market capitalization is marked to around $17.87 billion. In my opinion, Noble Energy, Inc. has a good growth potential in 2012, having its current market price reflecting the earnings per share concerns of its investors. However, this large cap stock is greatly undervalued, and should be purchased at its current market price. Currently trading at a mere 2% below its 52-week high, the stock has depicted an increase of around 2.18% in the past one month of its trade. An upward trend in the stock has seemingly initiated, wherein I expect its earnings per share to further increase. I firmly believe Noble Energy, Inc. should be bought at its current market price, with a long-term perspective.

Murphy Oil Corporation (NYSE:MUR) is a global company in the oil and gas sector, having operations in the U.S. and the U.K., pertaining to oil exploration, production, refining and marketing activities. With earnings per share of $4.49 and price to earnings of $13.50, Murphy Oil Corporation has a market capitalization of around $11.7 billion. The company has a strong payout ratio at around 20.67%, with 1.78% depicting its dividend yield. The current market price of Murphy Oil Corporation is approximately 5.60% above its 200 day simple moving average, and around 11% and 5.50% above its 50 and 20-day simple moving average, respectively. The company has around $46 book value per share, whereas $5.97 depicts its trailing twelve months diluted earnings per share. At its current market price, the company is still undervalued. The stock has a potential uptrend expected in 2012. With a positive outlook for the oil & gas sector in 2012, I would certainly recommend purchasing this stock at its current market price, especially as a long-term investment.

Dominion Resources, Inc. (NYSE:D) aggressively engages in the energy sector, as one of the largest transporters and exporters in the U.S. At a price earnings ratio of 19, and earnings per share of around $2.62, the company portrays a healthy dividend yield of around 4.22%. The company certainly appears to be undervalued at its current market price. However, there are certain parameters one ought to consider before investing in this stock. First, the stock depicts a beta of around 0.5, while trading at around 14 times its forward earnings. Second, the company suffers from the current and expected rise in energy prices, and also from lower capacity utilization. In my opinion, despite a good dividend yield, it is not advisable to purchase the stock at its current market price. I will avoid this stock for now.

Source: 5 Oil & Gas Players With Low P/Es