Baytex Energy (NYSE:BTE) develops petroleum and natural gas properties in Canada and has a $5 billion market cap. The stock yields 6.4% and pays its 22-cent dividend (about 70% of profits) like clockwork each quarter.
But Baytex’s exposure to natural gas is a double-edged sword. The diversification was good in 2010 as gas prices crept up off the bottom, but became an anchor on shares across 2012 as natural gas prices softened once more.
Right now, gas prices are once again moving down toward those low 2012 levels thanks to a warmer winter and weak demand overall. As such, Baytex is about 7% in the red in 2013 despite a rally across the broader market.
But natural gas prices seem pretty close to a floor, and the crude operations of Baytex should help prop up earnings in the second half of the year. The stock has already rebounded sharply in the last few weeks, up 13% since April 18, and seems to have a wind at its back again.
And the 6.4% yield should give you the patience to wait out bumps in the road.