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Santos vs Woodside shares: which is better value today?
Oil and gas shares like Santos Ltd (ASX: STO) and Woodside Energy Group Ltd (ASX: WDS) are among the ASX's most widely held energy stocks. With energy prices in focus and both companies riding strong year-to-date gains, it's fair for investors to wonder: between Santos and Woodside, which share offers better value right now? Here's how they stack up for both growth and income.
The case for Santos
Santos is a leading independent oil and gas producer spanning Australia, Papua New Guinea, Timor-Leste and Alaska. The company has deep Australian roots and, as of its company profile, boasts one of the largest exploration and production acreages in Australia. Santos supplies natural gas domestically and to Asian markets, and is building towards significant projects like PNG LNG and Barossa LNG.
Looking at the numbers, Santos currently trades with a market cap of $27.83 billion and a P/E ratio of 27.69. It pays a dividend yield of 3.52%, though its dividends are currently unfranked. Earnings per share sit at $0.225, and the company has delivered a very robust year-to-date return of 46.48%. Notably, Santos' dividend payout has generally increased over the years, but franking has diminished — none of the recent dividends have carried franking credits.
The case for Woodside
Woodside Energy Group is the largest independent Australian oil and gas operator, with extensive offshore production facilities and international assets. Its position was recently strengthened through a merger with BHP's oil and gas portfolio, as flagged in its most recent public description. With a long history and global ambition, Woodside remains a heavyweight among ASX energy companies.
Fundamentally, Woodside stands out. Its P/E ratio is 14.79, noticeably lower than Santos, suggesting the market is pricing it more cheaply relative to earnings. Woodside delivers a dividend yield of 4.90%, with dividends fully franked. Its EPS is a much stronger $1.605, and the year-to-date return clocks in at 47.94%. Unlike Santos, all Woodside dividends in recent years have been fully franked, a likely appeal for income investors.
Valuation comparison
Here's a direct head-to-head on key metrics:
| Santos | Woodside | |
|---|---|---|
| Market Cap | $27.83 billion | $62.70 billion |
| P/E Ratio | 27.69 | 14.79 |
| Dividend Yield | 3.52% | 4.90% |
| Dividend Franking | Unfranked | 100% Franked |
| Earnings per Share | $0.225 | $1.605 |
| Year to Date Return | 46.48% | 47.94% |
Woodside is much larger and offers both a higher and fully franked dividend yield, with a lower P/E and stronger per-share earnings. Santos is priced at a higher earnings multiple and doesn't offer franking at present.
Recent share price performance
The two shares have tracked similar momentum recently. Over the past fortnight, Santos' share price rose from $8.31 (2 Sep) to $8.57 (17 Sep), despite some ups and downs — an overall increase of roughly 3%.
Woodside's share price moved from $33.08 (2 Sep) to $32.98 (17 Sep), showing little net change but with more pronounced swings, including both rallies and dips.
Both shares have delivered impressive year-to-date gains (Santos: 46.48%, Woodside: 47.94%), but in this recent fortnight, Santos has slightly edged up while Woodside has been broadly steady.
Which is the better buy?
Both companies are proven performers in the oil and gas space and have posted strong year-to-date returns. But when it comes to value today, my pick would be Woodside. The reasons are clear: it trades on a far lower P/E (14.79 vs 27.69), offers a higher and fully franked dividend yield (4.90%), and boasts much stronger earnings per share. If income matters — especially for Australian retirees after franking credits — Woodside's 100% franking is a real drawcard. Santos, while delivering credible growth and momentum, simply doesn't match Woodside's combination of earnings power and franked dividends.
Both stocks have upside in an energy-hungry world, but based on the fundamentals and income appeal in front of me, I'd lean to Woodside as better value today.
