Baytex Energy Corp Offers a High Yield Supported by Solid Cash Flow Generation

Junior energy producer reports steady cash flow generation

A Member of Pat McKeough’s Inner Circle recently asked for his advice on a Canadian-based oil and gas producer with a diversified portfolio spanning the Western Canadian Sedimentary Basin and the Eagle Ford in Texas.

Pat likes the firm’s strong operational footprint across premium North American oil plays, strong cash flow generation and a clear commitment to shareholder value through dividends.

Baytex Energy Corp. (Symbol BTE on Toronto; www.baytexenergy.com) explores for, develops and produces oil and gas in Western Canada and the Eagle Ford region of Texas.

The company’s output is 16% natural gas and 84% oil.

In June 2023, Baytex completed its acquisition of Ranger Oil Corp. (symbol ROCC on Nasdaq) for $3.4 billion. Baytex paid $13.31 U.S. in cash and issued 7.49 Baytex shares for each Ranger share.

Baytex began to pay dividends after acquiring Ranger, with those quarterly payments starting at $0.0225 a share. The stock currently yields 3.5%.

In the quarter ended March 31, 2025, the company’s production fell 4.3%, to 144,194 barrels of oil equivalent per day from 150,620 barrels a year earlier.

[ofie_ad]

Cash flow rose 9.4% on higher realized oil and gas prices, to $463.9 million from $423.8 million. Cash flow per share rose 15.4%, to $0.60 from $0.52, due to fewer shares outstanding.

Baytex shares are very cheap in relation to cash flow

The addition of Ranger Oil has worked out well for Baytex. It operates exclusively in the Eagle Ford region of Texas, which boosts Baytex’s current presence in the area. The Eagle Ford shale basin now represents around 60% of Baytex’s total production.

Like all energy producers, the company will need oil and gas prices to move higher for it to keep reporting rising cash flow. But the company is well positioned to capitalize when prices do climb.

Today, the shares trade at just 1.2 times forecast 2025 cash flow per share of $2.21. That makes them very cheap for investors looking to profit from a continued energy rebound.

Recommendation in Pat’s Inner Circle: Baytex Energy is a buy for aggressive investors who can accept some risk.

Copy
Link copied
Email
Print

Find 5 Safe Stocks to
Buy & Hold for Long-Term
Growth and Steady Income

No Credit Card Required

SEND ME THIS FREE REPORT

Testimonials

The cornerstones of Pat’s strategy–value, diversification and timelines–make his newsletter, The Successful Investor, highly profitable while minimizing risk. His advice is no-nonsense, down-to-earth and based on solid research. You’ll know what to invest in and what to avoid.

Chuck Chakrapani, PhD
Investors Association of Canada
The older I get the better dividends look. For retirees and would-be retirees who want to sleep at night, I can’t think of a better source of information on reliable growing dividend income than Pat McKeough’s newsletter, Dividend Advisor.

Jonathan Chevreau
Financial Post Columnist
As a manager of more than $500 million in mutual funds, I have access to the best brokerage research available in this country. But I still take time to read Pat McKeough’s premium newsletters

John Sartz
I appreciate the 25 years of above market returns I received by following your advice. at least 95% of my investment decisions were based on TSI recommendations.

Chuck J.
Subscriber since 1996. Inner Circle Member Since 2006
The newsletters I receive in Inner Circle Pro are fantastic! I have been following Pat’s advice for years and everything he has said has been amazing. His commentaries are brilliant, insightful, educational, rational and balanced. My returns are almost double the TSE and I have referred many of my friends who have switched over to your services.

Walter H.
Inner Circle Pro subscriber

Free Reports

5 Best Stocks to Buy This Month

The Successful Investor Approach to AI Investing

7 Winning Strategies for Dividend Investors

The Best Blue Chips for Canadian Investors

The ETF Investor’s Handbook

The Canadian Guide on How to Invest in Stocks Successfully

Power and Profits of Energy Stocks

Juniors to Giants: The Complete Guide to Mining Stocks

How to Find the Best Growth Stocks

7 Pro Secrets to Value Investing

Browse Topics

Blue Chip Stocks

Blue chip stocks are big, well-established, dividend-paying corporations with strong business prospects. These are companies that also have sound management that should be able to make the right moves to keep competing successfully in a changing marketplace.

Dividend Stocks

Dividend stocks make cash payouts that serve as a way for companies to share the wealth they’ve accumulated. These payouts are drawn from earnings and cash flow and paid to the shareholders of the company. Typically, these dividends are paid quarterly, although they may be paid annually or even monthly as well.

Value Stocks

What are value stocks?

One of the sweetest and most profitable pleasures of successful investing is to buy high-quality “value stocks” (or stocks that are reasonably priced, if not cheap, in relation to its sales, earnings or assets), then hold on to them as mainstream investors recognize the value and push up the share price.

Growth Stocks

Growth stocks are companies that are likely to have sales and earnings growth well above market average. Frequently they pay few, if any, dividends. Instead they typically reinvest any extra cash flow to promote further growth. Chosen wisely—according to Pat McKeough’s advice—high-quality growth-oriented stocks can be worthwhile additions to most well-diversified portfolios.

ETFs

What are ETFs?

ETF is an acronym for exchange traded fund.. These exchange traded funds are used to track indexes as closely as possible, since investors cannot actually buy an index outright.

How To Invest

Pat McKeough has been making investing for beginners simple—and profitable—by helping investors make big gains for more than 25 years. His advice to beginning investors is the same as it is for all investors: buy high-quality, mostly dividend paying stocks (or ETFs that hold these stocks) and evenly spread your investments over the five main economic sectors (Resources, Manufacturing, Finance, Utilities and Consumer). Pat also believes investors should avoid stocks in the broker/media limelight and focus on those with hidden or little-noticed assets.

Wealth Management

Wealth management is the practice of putting your savings to work so that it continues to grow over your lifetime and will also benefit your heirs. Wealth management encompasses many different areas of investing like long term investment planning and retirement planning.

AI Investing

Artificial intelligence (AI) is essentially the merging of today’s big computing with big data. This has resulted in breakthroughs in everything from creating machines to recognize faces with more accuracy than a human, to the development of chatbots able to collect, organize and simplify all the Internet has to say on any topic.

Spinoffs

One of the ways a company can try to unlock its own hidden value is by creating a separate company out of a corporate subsidiary. The parent company can either sell stock in the new company to the public, or spin it off—hand the stock out to its own investors.

Penny Stocks

A penny stock in general trades for under five dollars a share, and as the name implies, sometimes for pennies. Most of the time they’re young companies, or start-ups in speculative markets like mining or technology.

Mining Stocks

Mining stocks are investments in companies that produce or explore for minerals. Some of these minerals include uranium, coal, molybdenum (which is used in steelmaking), copper, silver and gold. They are affected by fluctuating commodity prices in addition to their own business and operating risks.

Energy Stocks

What are energy stocks?

Businesses that work in the extraction, refining and delivery of energy sources such as natural gas, oil, uranium and coal, are considered energy stocks.