ASX:STO

Stock Analysis Report

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Executive Summary

Santos Limited explores for, develops, produces, transports, and markets hydrocarbons for homes and businesses in Australia and Asia. More Details

Rewards

Earnings are forecast to grow 55.12% per year

Risk Analysis

No risks detected for STO from our risk checks.


Snowflake Analysis

Adequate balance sheet with reasonable growth potential.


Similar Companies

Share Price & News

How has Santos's share price performed over time and what events caused price changes?


Latest Share Price and Events

Stable Share Price: STO is not significantly more volatile than the rest of Australian stocks over the past 3 months, typically moving +/- 7% a week.

Volatility Over Time: STO's weekly volatility (7%) has been stable over the past year.


Market Performance


7 Day Return

6.3%

STO

6.6%

AU Oil and Gas

2.4%

AU Market


1 Year Return

-21.5%

STO

-27.7%

AU Oil and Gas

-0.6%

AU Market

Return vs Industry: STO exceeded the Australian Oil and Gas industry which returned -27.7% over the past year.

Return vs Market: STO underperformed the Australian Market which returned -0.6% over the past year.


Shareholder returns

STOIndustryMarket
7 Day6.3%6.6%2.4%
30 Day24.9%21.3%8.0%
90 Day16.6%15.6%8.8%
1 Year-20.3%-21.5%-24.8%-27.7%2.7%-0.6%
3 Year31.6%25.6%-13.3%-22.2%24.3%9.0%
5 Year64.4%54.5%2.3%-12.2%56.9%25.7%

Long-Term Price Volatility Vs. Market

How volatile is Santos's share price compared to the market and industry in the last 5 years?


Simply Wall St News

Valuation

Is Santos undervalued compared to its fair value and its price relative to the market?

1.34x

Price to Book (PB) ratio


Share Price vs. Fair Value

Below Fair Value: STO (A$6.38) is trading above our estimate of fair value (A$1.05)

Significantly Below Fair Value: STO is trading above our estimate of fair value.


Price To Earnings Ratio

PE vs Industry: STO is unprofitable, so we can't compare its PE Ratio to the AU Oil and Gas industry average.

PE vs Market: STO is unprofitable, so we can't compare its PE Ratio to the Australian market.


Price to Earnings Growth Ratio

PEG Ratio: Insufficient data to calculate STO's PEG Ratio to determine if it is good value.


Price to Book Ratio

PB vs Industry: STO is good value based on its PB Ratio (1.3x) compared to the AU Oil and Gas industry average (1.6x).


Next Steps

Future Growth

How is Santos forecast to perform in the next 1 to 3 years based on estimates from 13 analysts?

55.1%

Forecasted annual earnings growth


Earnings and Revenue Growth Forecasts


Analyst Future Growth Forecasts

Earnings vs Savings Rate: STO is forecast to become profitable over the next 3 years, which is considered faster growth than the savings rate (2.3%).

Earnings vs Market: STO is forecast to become profitable over the next 3 years, which is considered above average market growth.

High Growth Earnings: STO's is expected to become profitable in the next 3 years.

Revenue vs Market: STO's revenue (6.4% per year) is forecast to grow faster than the Australian market (5.1% per year).

High Growth Revenue: STO's revenue (6.4% per year) is forecast to grow slower than 20% per year.


Earnings per Share Growth Forecasts


Future Return on Equity

Future ROE: STO's Return on Equity is forecast to be low in 3 years time (7.4%).


Next Steps

Past Performance

How has Santos performed over the past 5 years?

65.4%

Historical annual earnings growth


Earnings and Revenue History

Quality Earnings: STO is currently unprofitable.

Growing Profit Margin: STO is currently unprofitable.


Past Earnings Growth Analysis

Earnings Trend: STO is unprofitable, but has reduced losses over the past 5 years at a rate of 65.4% per year.

Accelerating Growth: Unable to compare STO's earnings growth over the past year to its 5-year average as it is currently unprofitable

Earnings vs Industry: STO is unprofitable, making it difficult to compare its past year earnings growth to the Oil and Gas industry (-44.9%).


Return on Equity

High ROE: STO has a negative Return on Equity (-0.041%), as it is currently unprofitable.


Next Steps

Financial Health

How is Santos's financial position?


Financial Position Analysis

Short Term Liabilities: STO's short term assets ($2.1B) exceed its short term liabilities ($1.1B).

Long Term Liabilities: STO's short term assets ($2.1B) do not cover its long term liabilities ($9.0B).


Debt to Equity History and Analysis

Debt Level: STO's debt to equity ratio (63.9%) is considered high.

Reducing Debt: STO's debt to equity ratio has reduced from 91.9% to 63.9% over the past 5 years.


Balance Sheet


Cash Runway Analysis

For companies that have on average been loss making in the past we assess whether they have at least 1 year of cash runway.

Stable Cash Runway: Whilst unprofitable STO has sufficient cash runway for more than 3 years if it maintains its current positive free cash flow level.

Forecast Cash Runway: STO is unprofitable but has sufficient cash runway for more than 3 years, due to free cash flow being positive and growing by 59.8% per year.


Next Steps

Dividend

What is Santos's current dividend yield, its reliability and sustainability?

0.89%

Current Dividend Yield


Dividend Yield vs Market

Notable Dividend: STO's dividend (0.89%) isn’t notable compared to the bottom 25% of dividend payers in the Australian market (2.08%).

High Dividend: STO's dividend (0.89%) is low compared to the top 25% of dividend payers in the Australian market (5.05%).


Stability and Growth of Payments

Stable Dividend: STO is not paying a notable dividend for the Australian market, therefore no need to check if payments are stable.

Growing Dividend: STO is not paying a notable dividend for the Australian market, therefore no need to check if payments are increasing.


Current Payout to Shareholders

Dividend Coverage: STO is not paying a notable dividend for the Australian market.


Future Payout to Shareholders

Future Dividend Coverage: No need to calculate the sustainability of STO's dividend in 3 years as they are not forecast to pay a notable one for the Australian market.


Next Steps

Management

How experienced are the management team and are they aligned to shareholders interests?

3.7yrs

Average management tenure


CEO

Kevin Gallagher (55 yo)

4.75yrs

Tenure

US$4,500,492

Compensation

Mr. Kevin Thomas Gallagher, B.Eng, MAICD, FIEAust, has been the Chief Executive Officer and Managing Director of Santos Limited since February 1, 2016. Mr. Gallagher served as the Chief Executive Officer o...


CEO Compensation Analysis

Compensation vs Market: Kevin's total compensation ($USD4.50M) is about average for companies of similar size in the Australian market ($USD3.58M).

Compensation vs Earnings: Kevin's compensation has increased whilst the company is unprofitable.


Leadership Team

NamePositionTenureCompensationOwnership
Kevin Gallagher
MD, CEO & Director4.75yrsUS$4.50m0.053%
$ 7.2m
Anthony Neilson
Chief Financial Officer3.92yrsUS$1.36m0.0028%
$ 379.5k
Petter Undem
Executive Vice President of Marketing1.25yrsUS$641.99kno data
Brett Woods
Executive Vice President of Developments3.67yrsUS$1.24m0.0066%
$ 900.5k
Vince Santostefano
Executive Vice President of Production Operations3.67yrsUS$1.41m0.0044%
$ 605.3k
David Banks
Executive Vice President of Onshore Oil & Gas2.83yrsUS$967.87k0.000040%
$ 5.4k
Brett Darley
Executive Vice President of Offshore Oil & Gas2yrsUS$1.22mno data
Andrew Nairn
Group Executive of Investor Relations12.75yrsno datano data
Jodie Hatherly
General Counselno datano datano data
Bill Ovenden
Executive Vice President of Exploration & New Ventures3.67yrsno datano data
Nick Fox
Head of Environment & Accessno datano datano data
Angus Jaffray
Executive Vice President People & Sustainability2.25yrsno datano data

3.7yrs

Average Tenure

Experienced Management: STO's management team is considered experienced (3.7 years average tenure).


Board Members

NamePositionTenureCompensationOwnership
Kevin Gallagher
MD, CEO & Director4.75yrsUS$4.50m0.053%
$ 7.2m
Peter Hearl
Independent Non-Executive Director4.5yrsUS$168.78k0.0023%
$ 318.3k
Keith Spence
Independent Non-Executive Chairman2.75yrsUS$358.67k0.0043%
$ 587.6k
Yasmin Allen
Independent Non-Executive Director6.08yrsUS$175.66k0.0024%
$ 319.7k
Guy Cowan
Independent Non-Executive Director4.5yrsUS$155.61k0.0022%
$ 296.5k
Hock Goh
Independent Non-Executive Director8.08yrsUS$161.90k0.0032%
$ 439.4k
Vanessa Guthrie
Independent Non-Executive Director3.33yrsUS$154.11k0.0019%
$ 255.7k
Janine McArdle
Independent Non-Executive Director1.08yrsUS$23.74k0.00086%
$ 117.0k
Yu Guan
Non-Executive Director1.5yrsUS$88.85kno data

4.5yrs

Average Tenure

62yo

Average Age

Experienced Board: STO's board of directors are considered experienced (4.5 years average tenure).


Ownership

Who are the major shareholders and have insiders been buying or selling?


Insider Trading Volume

Insider Buying: STO insiders have bought more shares than they have sold in the past 3 months.


Recent Insider Transactions

Ownership Breakdown

Dilution of Shares: Shareholders have not been meaningfully diluted in the past year.


Top Shareholders

Company Information

Santos Limited's company bio, employee growth, exchange listings and data sources


Key Information

  • Name: Santos Limited
  • Ticker: STO
  • Exchange: ASX
  • Founded: 1954
  • Industry: Oil and Gas Exploration and Production
  • Sector: Energy
  • Market Cap: AU$13.602b
  • Shares outstanding: 2.08b
  • Website: https://www.santos.com

Number of Employees


Location

  • Santos Limited
  • Santos Centre
  • Ground Floor
  • Adelaide
  • South Australia
  • 5000
  • Australia

Listings

TickerExchangePrimary SecuritySecurity TypeCountryCurrencyListed on
SSLZ.YOTCPK (Pink Sheets LLC)Sponsored AdrUSUSDJan 1975
STOS.FOTCPK (Pink Sheets LLC)YesOrdinary SharesUSUSDJan 1975
STS1DB (Deutsche Boerse AG)YesOrdinary SharesDEEURJan 1975
STOASX (Australian Securities Exchange)YesOrdinary SharesAUAUDJan 1975
STOCHIA (Chi-X Australia)YesOrdinary SharesAUAUDJan 1975

Biography

Santos Limited explores for, develops, produces, transports, and markets hydrocarbons for homes and businesses in Australia and Asia. Its five principal assets are located in the Cooper Basin, Queensland &...


Company Analysis and Financial Data Status

All financial data provided by Standard & Poor's Capital IQ.
DataLast Updated (UTC time)
Company Analysis2020/11/26 07:03
End of Day Share Price2020/11/26 00:00
Earnings2020/06/30
Annual Earnings2019/12/31


Unless specified all financial data is based on a yearly period but updated quarterly. This is known as Trailing Twelve Month (TTM) or Last Twelve Month (LTM) Data. Learn more here.