NEW YORK ( TheStreet) -- Baytex Energy (NYSE: BTE) has been upgraded by TheStreet Ratings from hold to buy. The company's strengths can be seen in multiple areas, such as its compelling growth in net income, revenue growth, impressive record of earnings per share growth, expanding profit margins and good cash flow from operations. We feel these strengths outweigh the fact that the company has had generally poor debt management on most measures that we evaluated.

Highlights from the ratings report include:
  • The net income growth from the same quarter one year ago has significantly exceeded that of the S&P 500 and the Oil, Gas & Consumable Fuels industry. The net income increased by 223.6% when compared to the same quarter one year prior, rising from $33.03 million to $106.86 million.
  • BTE's revenue growth trails the industry average of 39.6%. Since the same quarter one year prior, revenues rose by 26.6%. Growth in the company's revenue appears to have helped boost the earnings per share.
  • BAYTEX ENERGY CORP reported significant earnings per share improvement in the most recent quarter compared to the same quarter a year ago. The company has demonstrated a pattern of positive earnings per share growth over the past year. During the past fiscal year, BAYTEX ENERGY CORP increased its bottom line by earning $1.54 versus $0.79 in the prior year.
  • The gross profit margin for BAYTEX ENERGY CORP is rather high; currently it is at 56.20%. Regardless of BTE's high profit margin, it has managed to decrease from the same period last year. Despite the mixed results of the gross profit margin, BTE's net profit margin of 37.40% significantly outperformed against the industry.
  • Net operating cash flow has increased to $146.20 million or 31.19% when compared to the same quarter last year. Despite an increase in cash flow, BAYTEX ENERGY CORP's average is still marginally south of the industry average growth rate of 35.47%.

Baytex Energy Corp., through its subsidiaries, engages in the acquisition, exploration, development, and production of petroleum and natural gas in the Western Canadian Sedimentary Basin and the United States. The company has a P/E ratio of 34.7, below the average energy industry P/E ratio of 41.8 and above the S&P 500 P/E ratio of 17.7. Baytex Energy has a market cap of $5.3 billion and is part of the basic materials sector and energy industry. Shares are up 2.3% year to date as of the close of trading on Friday.

You can view the full Baytex Energy Ratings Report or get investment ideas from our investment research center.
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