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STO

Santos ASX:STO Stock Report

Last Price

AU$7.18

Market Cap

AU$24.0b

7D

3.3%

1Y

11.8%

Updated

13 Aug, 2022

Data

Company Financials +
STO fundamental analysis
Snowflake Score
Valuation4/6
Future Growth2/6
Past Performance3/6
Financial Health5/6
Dividends3/6

STO Stock Overview

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

Santos Competitors

Price History & Performance

Summary of all time highs, changes and price drops for Santos
Historical stock prices
Current Share PriceAU$7.18
52 Week HighAU$8.86
52 Week LowAU$5.84
Beta1.62
1 Month Change2.87%
3 Month Change-10.81%
1 Year Change11.84%
3 Year Change8.95%
5 Year Change118.24%
Change since IPO145.89%

Recent News & Updates

May 17
Santos Limited's (ASX:STO) Intrinsic Value Is Potentially 34% Above Its Share Price

Santos Limited's (ASX:STO) Intrinsic Value Is Potentially 34% Above Its Share Price

Does the May share price for Santos Limited ( ASX:STO ) reflect what it's really worth? Today, we will estimate the...

Shareholder Returns

STOAU Oil and GasAU Market
7D3.3%5.1%0.7%
1Y11.8%32.9%-8.5%

Return vs Industry: STO underperformed the Australian Oil and Gas industry which returned 32.9% over the past year.

Return vs Market: STO exceeded the Australian Market which returned -8.5% over the past year.

Price Volatility

Is STO's price volatile compared to industry and market?
STO volatility
STO Average Weekly Movement4.5%
Oil and Gas Industry Average Movement11.7%
Market Average Movement10.6%
10% most volatile stocks in AU Market18.0%
10% least volatile stocks in AU Market4.6%

Stable Share Price: STO is less volatile than 75% of Australian stocks over the past 3 months, typically moving +/- 5% a week.

Volatility Over Time: STO's weekly volatility (5%) has been stable over the past year.

About the Company

FoundedEmployeesCEOWebsite
19543,786Kevin Gallagherhttps://www.santos.com

Santos Limited explores for, develops, produces, transports, and markets hydrocarbons for homes and businesses in Australia and the Asia Pacific. Its five principal assets are located in the Cooper Basin, Queensland and NSW, Papua New Guinea, Northern Australia and Timor-Leste, and Western Australia. The company also holds an asset in Alaska; and engages in the development of carbon capture and storage technologies.

Santos Fundamentals Summary

How do Santos's earnings and revenue compare to its market cap?
STO fundamental statistics
Market CapUS$17.06b
Earnings (TTM)US$658.00m
Revenue (TTM)US$4.71b

25.9x

P/E Ratio

3.6x

P/S Ratio

Earnings & Revenue

Key profitability statistics from the latest earnings report
STO income statement (TTM)
RevenueUS$4.71b
Cost of RevenueUS$2.98b
Gross ProfitUS$1.73b
Other ExpensesUS$1.07b
EarningsUS$658.00m

Last Reported Earnings

Dec 31, 2021

Next Earnings Date

Aug 17, 2022

Earnings per share (EPS)0.20
Gross Margin36.73%
Net Profit Margin13.96%
Debt/Equity Ratio52.7%

How did STO perform over the long term?

See historical performance and comparison

Dividends

3.3%

Current Dividend Yield

45%

Payout Ratio
We’ve recently updated our valuation analysis.

Valuation

Is STO undervalued compared to its fair value, analyst forecasts and its price relative to the market?

Valuation Score

4/6

Valuation Score 4/6

  • Price-To-Earnings vs Peers

  • Price-To-Earnings vs Industry

  • Price-To-Earnings vs Fair Ratio

  • Below Fair Value

  • Significantly Below Fair Value

  • Analyst Forecast

Key Valuation Metric

Which metric is best to use when looking at relative valuation for STO?

Other financial metrics that can be useful for relative valuation.

STO key valuation metrics and ratios. From Price to Earnings, Price to Sales and Price to Book to Price to Earnings Growth Ratio, Enterprise Value and EBITDA.
Key Statistics
Enterprise Value/Revenue4.7x
Enterprise Value/EBITDA8.9x
PEG Ratio2.7x

Price to Earnings Ratio vs Peers

How does STO's PE Ratio compare to its peers?

STO PE Ratio vs Peers
The above table shows the PE ratio for STO vs its peers. Here we also display the market cap and forecasted growth for additional consideration.
CompanyPEEstimated GrowthMarket Cap
Peer Average14x
WDS Woodside Energy Group
22.3x13.3%AU$62.2b
BPT Beach Energy
10.5x8.5%AU$4.2b
ALD Ampol
14.3x-0.06%AU$8.0b
YAL Yancoal Australia
8.7xn/aAU$6.9b
STO Santos
25.9x9.7%AU$24.0b

Price-To-Earnings vs Peers: STO is expensive based on its Price-To-Earnings Ratio (25.9x) compared to the peer average (14x).


Price to Earnings Ratio vs Industry

How does STO's PE Ratio compare vs other companies in the AU Oil and Gas Industry?

Price-To-Earnings vs Industry: STO is expensive based on its Price-To-Earnings Ratio (25.9x) compared to the Australian Oil and Gas industry average (12.3x)


Price to Earnings Ratio vs Fair Ratio

What is STO's PE Ratio compared to its Fair PE Ratio? This is the expected PE Ratio taking into account the company's forecast earnings growth, profit margins and other risk factors.

STO PE Ratio vs Fair Ratio.
Fair Ratio
Current PE Ratio25.9x
Fair PE Ratio35.9x

Price-To-Earnings vs Fair Ratio: STO is good value based on its Price-To-Earnings Ratio (25.9x) compared to the estimated Fair Price-To-Earnings Ratio (35.9x).


Share Price vs Fair Value

What is the Fair Price of STO when looking at its future cash flows? For this estimate we use a Discounted Cash Flow model.

Below Fair Value: STO (A$7.18) is trading below our estimate of fair value (A$16.47)

Significantly Below Fair Value: STO is trading below fair value by more than 20%.


Analyst Price Targets

What is the analyst 12-month forecast and do we have any statistical confidence in the consensus price target?

Analyst Forecast: Target price is more than 20% higher than the current share price and analysts are within a statistically confident range of agreement.


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Future Growth

How is Santos forecast to perform in the next 1 to 3 years based on estimates from 14 analysts?

Future Growth Score

2/6

Future Growth Score 2/6

  • Earnings vs Savings Rate

  • Earnings vs Market

  • High Growth Earnings

  • Revenue vs Market

  • High Growth Revenue

  • Future ROE


9.7%

Forecasted annual earnings growth

Earnings and Revenue Growth Forecasts


Analyst Future Growth Forecasts

Earnings vs Savings Rate: STO's forecast earnings growth (9.7% per year) is above the savings rate (1.8%).

Earnings vs Market: STO's earnings (9.7% per year) are forecast to grow faster than the Australian market (6.1% per year).

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

Revenue vs Market: STO's revenue (4.4% per year) is forecast to grow slower than the Australian market (5.7% per year).

High Growth Revenue: STO's revenue (4.4% 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 (10.8%).


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Past Performance

How has Santos performed over the past 5 years?

Past Performance Score

3/6

Past Performance Score 3/6

  • Quality Earnings

  • Growing Profit Margin

  • Earnings Trend

  • Accelerating Growth

  • Earnings vs Industry

  • High ROE


38.3%

Historical annual earnings growth

Earnings and Revenue History

Quality Earnings: STO has high quality earnings.

Growing Profit Margin: STO became profitable in the past.


Past Earnings Growth Analysis

Earnings Trend: STO has become profitable over the past 5 years, growing earnings by 38.3% per year.

Accelerating Growth: STO has become profitable in the last year, making the earnings growth rate difficult to compare to its 5-year average.

Earnings vs Industry: STO has become profitable in the last year, making it difficult to compare its past year earnings growth to the Oil and Gas industry (299.7%).


Return on Equity

High ROE: STO's Return on Equity (4.8%) is considered low.


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Financial Health

How is Santos's financial position?

Financial Health Score

5/6

Financial Health Score 5/6

  • Short Term Liabilities

  • Long Term Liabilities

  • Debt Level

  • Reducing Debt

  • Debt Coverage

  • Interest Coverage

Financial Position Analysis

Short Term Liabilities: STO's short term assets ($4.8B) exceed its short term liabilities ($3.0B).

Long Term Liabilities: STO's short term assets ($4.8B) do not cover its long term liabilities ($13.4B).


Debt to Equity History and Analysis

Debt Level: STO's net debt to equity ratio (30.8%) is considered satisfactory.

Reducing Debt: STO's debt to equity ratio has reduced from 73.1% to 52.7% over the past 5 years.

Debt Coverage: STO's debt is well covered by operating cash flow (31.7%).

Interest Coverage: STO's interest payments on its debt are well covered by EBIT (8.2x coverage).


Balance Sheet


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Dividend

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

Dividend Score

3/6

Dividend Score 3/6

  • Notable Dividend

  • High Dividend

  • Stable Dividend

  • Growing Dividend

  • Earnings Coverage

  • Cash Flow Coverage


3.33%

Current Dividend Yield

Dividend Yield vs Market

Notable Dividend: STO's dividend (3.33%) is higher than the bottom 25% of dividend payers in the Australian market (2.56%).

High Dividend: STO's dividend (3.33%) is low compared to the top 25% of dividend payers in the Australian market (6.28%).


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.


Earnings Payout to Shareholders

Earnings Coverage: With its reasonably low payout ratio (45.4%), STO's dividend payments are well covered by earnings.


Cash Payout to Shareholders

Cash Flow Coverage: With its reasonably low cash payout ratio (48.7%), STO's dividend payments are well covered by cash flows.


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Management

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

0.6yrs

Average management tenure


CEO

Kevin Gallagher (57 yo)

6.5yrs

Tenure

US$6,339,111

Compensation

Mr. Kevin Thomas Gallagher, B.Eng, MAICD, FIEAust, served as Independent Non-Executive Director at Mineral Resources Limited since March 01, 2022 until March 2022. He has been the Chief Executive Officer a...


CEO Compensation Analysis

Compensation vs Market: Kevin's total compensation ($USD6.34M) is above average for companies of similar size in the Australian market ($USD4.21M).

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


Leadership Team

Experienced Management: STO's management team is not considered experienced ( 0.6 years average tenure), which suggests a new team.


Board Members

Experienced Board: STO's board of directors are considered experienced (4.8 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 been substantially diluted in the past year, with total shares outstanding growing by 61.1%.


Top Shareholders

Company Information

Santos Limited's 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
  • Implied Market Cap: AU$24.023b
  • Shares outstanding: 3.35b
  • Website: https://www.santos.com

Number of Employees


Location

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

Listings


Company Analysis and Financial Data Status

All financial data provided by Standard & Poor's Capital IQ.
DataLast Updated (UTC time)
Company Analysis2022/08/13 00:00
End of Day Share Price2022/08/12 00:00
Earnings2021/12/31
Annual Earnings2021/12/31


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.