ASX:STO

Stock Analysis Report

NOT FOR DISTRIBUTION
Header cover image

Executive Summary

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


Snowflake Analysis

Adequate balance sheet with acceptable track record.


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 has not had significant price volatility in the past 3 months.


Market Performance


7 Day Return

2.8%

STO

0.03%

AU Oil and Gas

0.2%

AU Market


1 Year Return

-16.1%

STO

-31.2%

AU Oil and Gas

-6.6%

AU Market

Return vs Industry: STO exceeded the Australian Oil and Gas industry which returned -34.5% over the past year.

Return vs Market: STO underperformed the Australian Market which returned -11% over the past year.


Shareholder returns

STOIndustryMarket
7 Day2.8%0.03%0.2%
30 Day4.7%-2.4%0.3%
90 Day14.6%2.5%13.7%
1 Year-14.2%-16.1%-28.2%-31.2%-2.8%-6.6%
3 Year69.0%62.1%-13.9%-23.2%18.6%2.9%
5 Year2.5%-18.2%-20.1%-34.6%36.9%7.3%

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?

12.21x

Price to Earnings (PE) ratio


Share Price vs. Fair Value

Below Fair Value: STO (A$5.56) is trading above our estimate of fair value (A$1.09)

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


Price To Earnings Ratio

PE vs Industry: STO is poor value based on its PE Ratio (12.2x) compared to the AU Oil and Gas industry average (8.1x).

PE vs Market: STO is good value based on its PE Ratio (12.2x) compared to the Australian market (15.5x).


Price to Earnings Growth Ratio

PEG Ratio: STO is poor value based on its PEG Ratio (2.7x)


Price to Book Ratio

PB vs Industry: STO's PB Ratio (1.1x) is in line with the AU Oil and Gas industry average.


Next Steps

Future Growth

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

4.5%

Forecasted annual earnings growth


Earnings and Revenue Growth Forecasts


Analyst Future Growth Forecasts

Earnings vs Savings Rate: STO's forecast earnings growth (4.5% per year) is above the savings rate (2.3%).

Earnings vs Market: STO's earnings (4.5% per year) are forecast to grow slower than the Australian market (14.7% per year).

High Growth Earnings: STO's earnings are forecast to grow, but not significantly.

Revenue vs Market: STO's revenue (1.4% per year) is forecast to grow slower than the Australian market (4.1% per year).

High Growth Revenue: STO's revenue (1.4% 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 (6.7%).


Next Steps

Past Performance

How has Santos performed over the past 5 years?

56.8%

Historical annual earnings growth


Earnings and Revenue History

Quality Earnings: STO has high quality earnings.

Growing Profit Margin: STO's current net profit margins (16.7%) are lower than last year (17.2%).


Past Earnings Growth Analysis

Earnings Trend: STO has become profitable over the past 5 years, growing earnings by 56.8% per year.

Accelerating Growth: STO's earnings growth over the past year (7%) is below its 5-year average (56.8% per year).

Earnings vs Industry: STO earnings growth over the past year (7%) exceeded the Oil and Gas industry -15.6%.


Return on Equity

High ROE: STO's Return on Equity (8.8%) is considered low.


Next Steps

Financial Health

How is Santos's financial position?


Financial Position Analysis

Short Term Liabilities: STO's short term assets ($2.2B) exceed its short term liabilities ($1.3B).

Long Term Liabilities: STO's short term assets ($2.2B) do not cover its long term liabilities ($7.5B).


Debt to Equity History and Analysis

Debt Level: STO's debt to equity ratio (52.1%) is considered high.

Reducing Debt: STO's debt to equity ratio has reduced from 87.6% to 52.1% over the past 5 years.

Debt Coverage: STO's debt is well covered by operating cash flow (51.2%).

Interest Coverage: STO's interest payments on its debt are well covered by EBIT (5.6x coverage).


Balance Sheet


Next Steps

Dividend

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

2.78%

Current Dividend Yield


Dividend Yield vs Market

Notable Dividend: STO's dividend (2.78%) is higher than the bottom 25% of dividend payers in the Australian market (2.46%).

High Dividend: STO's dividend (2.78%) is low compared to the top 25% of dividend payers in the Australian market (6.68%).


Stability and Growth of Payments

Stable Dividend: STO's dividend payments have been volatile in the past 10 years.

Growing Dividend: STO's dividend payments have fallen over the past 10 years.


Current Payout to Shareholders

Dividend Coverage: With its reasonably low payout ratio (34%), STO's dividend payments are well covered by earnings.


Future Payout to Shareholders

Future Dividend Coverage: STO's dividends in 3 years are forecast to be well covered by earnings (29.8% payout ratio).


Next Steps

Management

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

3.4yrs

Average management tenure


CEO

Kevin Gallagher (55 yo)

4.5yrs

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 ($USD4.50M) is above average for companies of similar size in the Australian market ($USD3.11M).

Compensation vs Earnings: Kevin's compensation has been consistent with company performance over the past year.


Leadership Team

NamePositionTenureCompensationOwnership
Kevin Gallagher
MD, CEO & Director4.5yrsUS$4.50m0.053%
$ 5.8m
Anthony Neilson
Chief Financial Officer3.67yrsUS$1.36m0.0028%
$ 308.6k
Petter Undem
Executive Vice President of Marketing1yrUS$641.99kno data
Brett Woods
Executive Vice President of Developments3.42yrsUS$1.24m0.0066%
$ 732.2k
Vince Santostefano
Executive Vice President of Production Operations3.42yrsUS$1.41m0.0044%
$ 492.2k
David Banks
Executive Vice President of Onshore Oil & Gas2.58yrsUS$967.87k0.000040%
$ 4.4k
Brett Darley
Executive Vice President of Offshore Oil & Gas1.75yrsUS$1.22mno data
Andrew Nairn
Group Executive of Investor Relations12.5yrsno datano data
Jodie Hatherly
General Counselno datano datano data
Bill Ovenden
Executive Vice President of Exploration & New Ventures3.42yrsno datano data
Nick Fox
Head of Environment & Accessno datano datano data
Angus Jaffray
Executive Vice President People & Sustainability2yrsno datano data

3.4yrs

Average Tenure

Experienced Management: STO's management team is considered experienced (3.4 years average tenure).


Board Members

NamePositionTenureCompensationOwnership
Kevin Gallagher
MD, CEO & Director4.5yrsUS$4.50m0.053%
$ 5.8m
Peter Hearl
Independent Non-Executive Director4.25yrsUS$168.78k0.0023%
$ 258.8k
Keith Spence
Independent Non-Executive Chairman2.5yrsUS$358.67k0.0043%
$ 477.8k
Yasmin Allen
Independent Non-Executive Director5.83yrsUS$175.66k0.0024%
$ 259.9k
Guy Cowan
Independent Non-Executive Director4.25yrsUS$155.61k0.0022%
$ 241.1k
Hock Goh
Independent Non-Executive Director7.83yrsUS$161.90k0.0032%
$ 357.3k
Vanessa Guthrie
Independent Non-Executive Director3.08yrsUS$154.11k0.0018%
$ 193.6k
Janine McArdle
Independent Non-Executive Director0.83yrUS$23.74k0.00086%
$ 95.1k
Yu Guan
Non-Executive Director1.25yrsUS$88.85kno data

4.3yrs

Average Tenure

62yo

Average Age

Experienced Board: STO's board of directors are considered experienced (4.3 years average tenure).


Ownership

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


Insider Trading Volume

Insider Buying: Insufficient data to determine if 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$11.061b
  • 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 Analysis2020/08/04 10:45
End of Day Share Price2020/08/04 00:00
Earnings2019/12/31
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.