How attractive is the Santos dividend right now?

We check the oil and gas giant’s dividend after such a strong year.

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Key points

  • The ASX 200 has had a rough year in 2022
  • But ASX 200 energy shares like Santos have been an exception
  • But how is Santos' dividend looking after such a strong year?

It’s fair to say that ASX 200 energy shares have been at the centre of ASX attention in 2022. With inflation concerns and rising oil prices, the Santos Ltd (ASX: STO) share price, along with many other ASX energy shares, has exploded. Santos was going for $6.61 a share at the start of the year.

Today, it’s sitting at $7.54, up more than 14% year to date. It was only earlier this month that Santos hit a new 52-week high of $8.86 too.

But, as we know, rising share prices also have the unpleasant side effect of lowering a company’s trailing dividend yield. So after these impressive gains over the year so far, where does the Santos dividend stand today?

Well, Santos’ last dividend payment was the final dividend that investors received back on 24 March. This was a payment of 11.1 cents per share, franked at 70%. Before that, Santos paid out its interim dividend of 7.69 cents per share back in September last year. That dividend was fully franked. These two dividend payments represented significant growth for the company.

How does the Santos dividend stack up?

Before 2022’s final dividend, the company paid out a final dividend for 2021 that came to 6.32 cents per share, fully franked. The company’s previous interim dividend was also much lower than its most recent one. That was the 2.91 cents per share payment from 2020.

But circling back to Santos’ most recent dividend payments, these two dividends give the company a trailing yield of 2.6% on the current share price.

So is this an attractive dividend yield? Well, that’s in the eye of the investor, to a certain extent. But it’s worth noting that Santos’ trailing dividend yield is certainly on the low side when it comes to some other ASX energy shares. Santos’ energy peer Woodside Energy Group Ltd (ASX: WDS) currently has a trailing dividend yield of 5.94%. New Hope Corporation Limited (ASX: NHC)’s dividend yield is now over 7%.

But Santos is still topping Beach Energy Ltd (ASX: BPT) and its current yield of 1.22%. So it could be worse.

A caveat to finish on though. Santos’ last dividend was paid out in March, just after global oil prices really started taking off. In the months since, the company has likely been benefitting enormously from the rise in global oil prices we have seen ever since. Thus, it’s very possible that Santos’ next dividends will be significantly higher than the most recent payments it has doled out.

But we shall have to wait and see.

In the meantime, the current Santos share price gives this ASX 200 energy share a market capitalisation of $25.26 billion.

Motley Fool contributor Sebastian Bowen has no position in any of the stocks mentioned. The Motley Fool Australia's parent company Motley Fool Holdings Inc. has no position in any of the stocks mentioned. The Motley Fool Australia has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

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