Insights

Why the Santos (ASX:STO) share price is outperforming Woodside in 2021

Why one Aussie energy giant is outperforming its rival in 2021.
The post Why the Santos (ASX:STO) share price is outperforming Woodside in 2021 appeared first on The Motley Fool Australia. –

The Santos Ltd (ASX: STO) share price has been on something of a run in the last year. Shares in the Aussie energy giant have climbed 34.2% higher in the last 12 months after closing at $7.06 per share on Thursday.

That means Santos now boasts a market capitalisation of $14.7 billion and is starting to approach its $7.84 52-week high. However, Santos isn’t the only Aussie oil and gas share doing well right now.

Shares in Woodside Petroleum Limited (ASX: WPL) are up 11.2% in the last year. Keen-eyed investors, however, will note that the Santos share price has been outperforming Woodside in 2021. Here’s why.

Why the Santos share price is outpacing Woodside right now

Woodside shares have actually edged 0.4% lower in 2021 to $22.97 per share. A pullback in oil prices combined with a softer second quarter update saw the company’s value fall 1.0% in Thursday’s trade.

Woodside reported a 4% decline in quarterly production to 22.7 million barrels of oil equivalent (MMboe) yesterday. The company cited scheduled maintenance and adverse weather impacts as key mitigating factors during the quarter. It wasn’t all bad news, however, with Woodside reporting a 15% quarter-on-quarter increase in sales revenue to $1,285 million.

At the same time, the Santos share price climbed 0.1% higher yesterday. The group is yet to release its own second quarter report which investors will be watching closely.

However, Santos was recently assigned a BBB credit rating with a “stable” outlook from Fitch Ratings. Fitch cited the company’s long-term, fixed-price domestic gas contracts as providing portfolio diversification against its oil-linked revenues. Fitch also said the company has “some flexibility over timing and expenditure” with the ability to manage leverage.

The company generated US$302 million in first-quarter free cash flow with higher commodity prices boosting revenues. These numbers and a focus on a diverse range of growth projects has had investors driving up the Santos share price 2021.

Santos has been focused on capital investment in recent years and this focus on new and expanded assets has increased its potential production output in the short to medium term.

Foolish takeaway

Of course, 6 months is a very short-term perspective in investing. The Santos share price has performed well to start the year but rising crude oil prices is good news for both major Aussie operators.

It’s worth keeping an eye on both Woodside and Santos as the commodities landscape continues to take shape in the post-COVID recovery phase.

The post Why the Santos (ASX:STO) share price is outperforming Woodside in 2021 appeared first on The Motley Fool Australia.

Should you invest $1,000 in Santos right now?

Before you consider Santos, you’ll want to hear this.

Motley Fool Investing expert Scott Phillips just revealed what he believes are the 5 best stocks for investors to buy right now… and Santos wasn’t one of them.

The online investing service he’s run for nearly a decade, Motley Fool Share Advisor, has provided thousands of paying members with stock picks that have doubled, tripled or even more.* And right now, Scott thinks there are 5 stocks that are better buys.

*Returns as of May 24th 2021

More reading

5 things to watch on the ASX 200 on Friday

ASX 200 drops, Woodside down, Sezzle rises

Woodside (ASX:WPL) share price lower on Q2 update
5 things to watch on the ASX 200 on Thursday

5 things to watch on the ASX 200 on Wednesday

Motley Fool contributor Ken Hall 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 Bruce Jackson.

Trade The World Anywhere & Anytime!

Mobile app platform with over 50,000 global listed securities across 12 markets (over 70% global market capitalisation), right from your Android or iOS device.

Integrated with exclusive trading idea and investment analysis tools to help you find actionable insight on virtually every financial instrument across our 12 global markets, to help you optimise your trading strategies.

Refer Your Friends

Tell your friends about Monex and gift them FREE access to our trading tools.

We respect your privacy and will only send this one email notification to your friends. 

Share With Your Friends

Share on facebook
Share on twitter
Share on linkedin

Monex Trading Tools Access and Usage Terms

The Monex Trading Tools (referred to as ‘tools’ hereafter) are available to you inside your client portal;


To activate access to the tools, you must have a verified and approved trading account and have made a deposit of at least AUD $1000.


An active and funded account with a positive trading balance is required to continue to have access to the tools;


Although the tools are available to you indefinitely, Monex Securities may at it’s discretion disable access to the tools in the future;


Monex securities reserves the right to change these terms and conditions from time to time, as it sees fit, without notice.

Important Notice
iOS & Android App - 12 International Markets & Over 70% Global Market Cap. $0 Brokerage On US Trades. Click Here!