Baytex Energy (TSX: BTE) has risen 50% in recent months. Investors who have missed the strout of the spring rate route wonder if BTE shares are still undervalued and are good to buy as an energy pick for a self-driven tax-free savings account (TFSA) or registered pension saving plan (RRSP).
Baytex Energy stock price
Baytex acts above $ 3 per share at the time of writing compared to $ 2 during the April dive. Long -term followers of BTE know that the share price in both directions can go on a number of wild journeys.
In June 2014, Batyex traded around $ 48 per share. The company had just closed its purchase of US $ 2.8 billion from Aurora oil and gas, so that Baytex strategic assets was given in the Eagle Ford Shale Play in Texas. West Texas Intermediate (WTI) oil traded around US $ 100 per barrel at the time. Baytex expected a strong turnover and cash flow growth from the deal and increased the dividend by 9% to an annual payout of $ 2.88 per share.
Unfortunately, Saudi Arabia has flooded the market in the coming months in an attempt to squeeze out the American shale producers. The oil price fell and at the end of 2014, Baytex had to dramatically lower his dividend to maintain the cash flow to cover interest costs on his large debt position to close the Aurora deal.
Things worse steadily for Baytex shareholders in the coming years. The board ultimately suspended the dividend and brought in new management to straighten the ship. The sale of non-core assets helped the debt position away and Baytex was able to hold its best assets. However, the pandemic led to more pain. At the lows of the crash, Baytex traded for less than $ 0.40 per share.
Interest rates and an increase in oil prices helped the energy sector to return strongly in 2021 and the first half of 2022. BTE repaired dividend payments on the jump in Cash Flow.
The share increased by June 2022 to $ 9 per share when WTI traded above US $ 120 per barrel. The management shifted back to acquisition mode, where Ranger Oil, another Eagle Ford player, was purchased for US $ 2.5 billion in 2023. The deal recharged the balance with debts. Since then, oil has largely been in a downward trend and the Baytex stock price has followed the bearing.
Gain
Baytex generated the net result of $ 152 million, or $ 020 per share in Q2 2025. This has risen from $ 104 million or $ 0.13 per share for the same period last year. In the first half of 2025, Baytex generated $ 221 million in net result compared to $ 90 million in the first six months of 2024.
The management is aimed at debt reduction and does a good job to chip the debt position. The net debt at the end of the second quarter of 2025 was $ 2.3 billion compared to $ 2.6 billion at the same time last year.
Baytex expects to generate $ 400 million in free cash flow in 2025. Management plans will apply 100% of the free cash flow after dividend payments to reduce debts. The net debt at the end of 2025 is expected to be around $ 2 billion. The current market capitalization of Baytex is around $ 2.4 billion.
At the time of writing, the dividend yield is 2.9%.
Oil market Outlook
Analysts in general expect the oil prices to be confronted in 2026. OPEC intends to increase the offer to try to recapture the lost market share. At the same time, non-OPEC producers, including Canada and the United States, establish production records. The question can weaken if the US glides into a recession and worsen the economic challenges of China.
Time to buy?
Baytex is usually a volatile shares and agile traders can make good money. However, the current prospects for oil prices are not great in the short term. As such, buy-and-hold investors may want to consider other opportunities in the sector that are more stable and offer higher dividend yields.
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