Baytex Energy (TSX:BTE) has long now been a company clouded by loss and debt. Once a Canadian stock trading for nearly $50 per share and offering a healthy dividend can now bought for under $3 per share, $2.11 at writing, and no dividend to be found.
Obviously they are not alone in that respect. The Alberta energy industry taking a huge hit since 2014 but Baytex remains. The company has shown that it is willing to actively push forward and make the best of the situation.
A recent acquisition (2018) of Raging River has provided the company with some added growth potential, diversification, and stronger cash flows that will help overcome the debt that Baytex currently holds.
Production for the company is solid, and expected to be 21% higher overall in 2019 over 2018.
Naturally the oil and gas industry would have to do its part in allowing Baytex to grow, and they have some ground to make up before things start to look really good.
But despite the situation the company has shown that it has the ability to take on the challenge, diversify, and become more financially stable. The company’s maintenance of strong operations shows they would be in a good position to take full advantage of rising oil prices should they climb in late 2019/2020.
Does Baytex still have potential?
Baytex is trading a discount compared to its industry counterparts, so this is a plus when you look at the work the company is doing to manage their position. Oil markets could be unpredictable in the near future, but if the prices do float and remain a little higher it could mean a respectable come-back for Baytex Energy.
The more cash flows the company can generate the faster they will be able to manage debt and build further cash flows. Some caution should be executed in the energy industry right now, but if one is looking to capture a few potential bargains, it would be worth taking a deeper look into Baytex Energy. However, keep in mind much like some material stocks, oil and gas stocks will continue to remain volatile.