(FORTUNE Magazine) – Only bullheaded contrariness or folly, it might seem, could prompt an investor to put money in oil stocks these days. The average price refiners pay for crude has fallen by a third since last November to between $17 and $18 a barrel. Trends in the spot price of West Texas intermediate, a benchmark crude that has fallen by more than half to about $12 a barrel, presage a further weakening. Some oil companies are in shaky financial condition, carrying mountains of debt as the result of mergers and stock repurchase programs. ''If oil stabilized at $15 a barrel, most oil companies wouldn't be able to earn their dividends,'' warns Frederick Leuffer, a security analyst at the New York brokerage firm of Cyrus J. Lawrence. An important faction of Wall Street analysts believe, however, that some oil stocks will indeed become attractive if prices settle around $15. By the time that happens, reasons William Randol, an oil analyst at First Boston Corp., ''there would be a broad retreat in the oil stocks, whose prices have not fallen as much as crude. Then we would begin recommending strong companies like Exxon and Amoco.'' If these stocks plunged, Randol says, investors would begin to find the dividend yields as attractive as the payouts on bonds and utility stocks. Barry Good of Morgan Stanley agrees. His favorite dividend play is Exxon, the world's largest oil company and a financial supertiger: $2.4 billion in cash, and long-term debt that is a mere 14% of capital. With a cash flow that could exceed $10 a share in 1986 even if crude prices fall to $15 a barrel, Exxon will have no trouble maintaining its generous $3.60 dividend, says Good. He counsels investors to buy Exxon stock whenever it falls to $47, as it did a year ago. At that price the yield is a munificent 7.7% -- twice the average for stocks making up Standard & Poor's 500-stock index. Good also likes Amoco at $54 a share, not far below its recent price, where its $3.30 dividend would work out to a 6% yield. Amoco too has a formidable balance sheet, with $1 billion in cash and debt equal to only 21% of capital. Good expects Amoco's substantial refining and retail operations to help maintain cash flow and keep the dividend secure. Thomas Petrie of First Boston likes Amoco, but would not purchase the stock unless it fell to $44 and yielded 7.5%.

Sun Co., another financial bastion, is a favorite of Arthur Smith, president of John S. Herold, a petroleum research firm based in Greenwich, Connecticut. Smith, who has scrutinized oil companies' cash flows, sees no reason why a company like Sun should sell for a mere three times 1985 cash flow while companies making up the Dow Jones industrial average command an average price of seven times cash flow. Petrie of First Boston also admires Sun's shining numbers. Debt stands at a modest 20% of capital, while projected cash flow for 1986 is $11.50 a share, almost four times the dividend. Sun has started to repurchase shares, but Petrie doubts it will take on more debt to finance the buyback. He would recommend the stock as the price neared $40 a share, where it would yield 7.5%. Though bearish on oil stocks, Leuffer of Cyrus J. Lawrence considers Atlantic Richfield the best of the bunch. Nervous investors have taken the stock down $16 a share from its six-month high of $68. As oil prices began to tumble, some analysts wondered whether Arco's cash flow would be sufficient to cover exploration expenses, interest costs, and the $4 dividend. But Leuffer says the worriers are wrong. Arco undertook a massive restructuring program last year, selling or shutting most of its metal mining and refining facilities and disposing of its gas stations and oil refineries east of the Mississippi. The company also spent $3.4 billion, much of it borrowed, to buy in 30% of its shares. Though that boosted debt from 32% of capital to 53%, Arco's dividend, 7.7% of the recent price, does not look endangered. The company recently announced a 44% cut in capital expenditures for 1986, which, Leuffer says, safeguards the payout even if oil prices settle in the mid- teens. Few oil companies are expected to register growing earnings this year. , Petrie has high hopes, however, for Hamilton Oil, a Denver-based independent producer that derives over 90% of its oil and gas revenues from the North Sea. Despite declining oil prices, Petrie thinks Hamilton will increase earnings 30% in 1986 to $1.20 a share, thanks to a recent doubling of its North Sea production. After rising as high as $19 a share in December, Hamilton's stock fell to $12 in January as oil prices crumbled. Petrie considers the stock an excellent value at its recent price, only 2.4 times estimated 1986 cash flow. Another independent bucking the earnings downtrend is Triton Energy Corp. This Dallas-based wildcatter has been striking oil in France, of all places, and its production in the Paris area has jumped 60-fold in two years. Chief Executive William Lee says Triton will make plenty of money even if oil prices remain at $15 a barrel. Barry Sahgal, research director at the New York brokerage firm of Ladenburg Thalmann & Co., recommends the stock, currently selling for 4.5 times his $4.25-per-share estimate of 1986 cash flow. He thinks Triton can earn $1.50 per share in 1986, up 39% from last year. That would allow the Texans to pass around plenty of French champagne.

CHART: COMPANY REVENUES NET STOCK PRICE RECENT latest four INCOME RANGE PRICE quarters in millions last 12 months P/E in millions multiple 1 Exxon $91,620.0 $4,870.0 $56.125-$46.125 $52.25 7.0 Amoco $28,873.0 $1,953.0 $70.25-$53.125 $58.00 7.8 Atlantic Richfield $22,492.0 ($202.0) $67.875-$45.375 $52.25 7.6 Sun $15,080.0 $527.0 $56.25-$42.25 $48.50 10.3 Hamilton Oil $211.2 $22.1 $19.625-$10.5 $12.00 18.2 Triton Energy $74.1 $12.2 $35.50-$16.875 $19.00 13.2 1Multiple based on earnings for the latest four quarters, exclusive of ! nonrecur ing items.