Baytex Energy Corp T.BTE

BTE, WCP, both trading under 3x earnings

[Wildfury]

Once again, I look at both Baytex & Whitecap shares trading at under 3x P/E Ratios, makes no sense & both are severely undervalued. For example, ARX trades at 15x earnings, TOU at 12x, BIR trades at 9x earnings. I could keep comparing with many other Canadian oil and gas companies that are also in double digit P/E Ratios. Would it be safe to say that Baytex energy shares should be trading at least 10x earnings, equaling approximately $25.00? As for Whitecap resources, a P/E multiple of 10x should be in the $30.00 range. What's holding these two behind in the valuations dept? Is it the outstanding shares & debt? I trying to understand why so many other companies are trading at 10x earnings or above since many also have debt, some have fewer shares & at the same time have less revenue, less production, less FCF. Thoughts on this topic?

[Cobalt]

I brought up HWX 30 PE why i got out , glad i did , was told PE should not be used of energy stock :)

[ROIcrusader]

You are correct, PE is not nearly as relevant to oil companies as any metric dealing with CASH FLOW. Specifically FREE CASH FLOW. 

[BayStreetWolfTO]

It seems with this I am on the right track to continue to pile my dividends into both. Since market value doesn't always translate the key I guess for me remains...pay the debt to $800M...while you do that increase my equity % with buybacks...once you get to $800M pay my dividend at a higher equity %. Baytex is a bit further behind WCP on debt (and WCP has a dividend). What holds back WCP is

[Tommy007]

Yes agree. The value of Baytex should be between $28 - 33 under current environment with high crude and inflation.