Crude oil has corrected from highs in 2022 on fears of a global recession. I believe that this correction is a good time to look at some of the best oil and gas stocks to buy for an attractive dividend income. Even with the big focus on renewable energy, the demand for oil will remain strong in the coming decade.

I must also mention that OPEC+ announced a surprise production cut last month. It’s clear that the objective is to support oil prices as demand sags on a relative basis. In all probability, the worst of the correction is over.

Therefore, there is a possibility of oil trending higher in the second half of 2023. My focus is on three quality oil and gas stocks to buy that provide good dividends. I also believe that these stocks will continue to deliver steady dividend income growth in the coming years.

Let’s discuss the reasons to be bullish on these stocks.

Chevron Corporation (CVX)

Chevron Corporation (NYSE:CVX) is the best bet among oil and gas stocks to buy with a dividend yield of 3.6%. As a matter of fact, CVX stock has managed to remain steady amidst market volatility in the last 12 months. With the company showcasing strong fundamentals, it seems a rally is imminent. Further, the company is positioned for sustained dividend growth.

A big positive is that Chevron has an investment grade balance sheet. As of Q1 2023, the company reported a net-debt ratio of 4.4%. This gives Chevron high financial flexibility for aggressive investments. The company has already planned for annual capital expenditures ranging from $13 to $17 billion through 2027.

It’s also worth noting that Chevron reported operating cash flow of $9 billion for Q1 2023. Even with some correction in oil price, the company is likely to deliver an annual operating cash flow in excess of $35 billion. Therefore, the company’s dividend growth should remain healthy for at least several more years.

Occidental Petroleum (OXY)

Occidental Petroleum (NYSE:OXY) is another quality name among oil and gas stocks to buy. It seems to be among the favorite portfolio stocks for Warren Buffett. The 1.18% dividend yield stock is attractively valued and I expect healthy dividend growth in the coming years.

Last year, Occidental focused on improving its credit metrics. The company managed to repay over $10.5 billion of its debt. This represented 37% of the total outstanding principal. With healthy cash flows likely to continue, debt reduction will remain in focus. Occidental aims for an investment grade balance sheet in the coming years. If they manage to achieve that goal, higher shareholder rewards are likely.

It’s also worth noting that the company ended 2022 with proved reserves of 3.8 billion barrels of oil equivalent. With a healthy reserve base and an attractive break-even asset profile, Occidental is well positioned to create shareholder value.

Aker BP ASA (AKRBF)

Aker BP ASA (OTCMKTS:AKRBF) stock has a current dividend yield of 9.0%, and I believe that stock is undervalued. As an overview, Aker BP is focused on oil and gas exploration activity in the Norwegian Continental Shelf. The company has quality assets, a low break-even and a strong balance sheet.

Aker BP reported revenue of $3.3 billion for Q1 2023. For the same period, the company’s EBITDA was $2.9 billion. Further, operating cash flow for the quarter was $1.7 billion. Clearly, their EBITDA margin is robust and the assets are a cash flow machine on the back of a low break-even.

For Q1, Aker reported production of 435 thousand barrels of oil equivalents per day (mboepd). The company expects to boost production to 525mboepd by 2028. The guidance seems conservative because Aker has been active on the inorganic growth front. Additionally, the company has 770 million barrels of oil equivalent in net oil and gas resources. With strong financial flexibility for exploration activity, healthy production growth is likely to continue.

On the date of publication, Faisal Humayun did not hold (either directly or indirectly) any positions in the securities mentioned in this article. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.