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.

The post Santos vs Woodside: Which ASX energy share is better value? appeared first on The Motley Fool Australia.

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Motley Fool contributor Laura Stewart 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. This article was prepared with the assistance of Large Language Model (LLM) tools for the initial draft. Any content assisted by AI is subject to our robust human-in-the-loop quality control framework, involving thorough review, substantial editing, and fact-checking by our experienced writers and editors holding appropriate credentials. The Motley Fool Australia stands behind the work of our editorial team and takes ultimate responsibility for the content published by The Motley Fool Australia.

Owning Woodside Energy Group Ltd (ASX: WDS) shares has seen its fair share of volatility in the last few years.

I think the ASX energy share could be one to investigate following all of the uncertainty amid the Middle East conflict.

Woodside is one of the largest oil and gas businesses on the ASX, so what happens with the energy prices has a big impact on its earnings.

We’re going to look at what analysts are predicting with Woodside earnings in the next few years, which could give insights as to whether the Woodside share price is undervalued or not.

FY26

We’re about three quarters of the way through the Woodside 2026 financial year, as its financial year follows the calendar year.

The company has already reported how it performed in the first half of FY26.

Woodside revealed that operating revenue grew 13% to US$7.4 billion, underlying net profit after tax (NPAT) grew 7% to $1.3 billion, and free cash flow surged 159% to $352 million.

The numbers were driven by a 20% rise in the average realised price to US$74 per barrel of oil equivalent (BOE). That helped offset a 13% reduction in total production volume to 86.5 million barrels of oil equivalent.

One of the biggest future drivers of future earnings may be the completion of the various projects it’s working on. In the FY26 half-year result, it reported that Scarborough was 98% complete, Trion was 64% complete, and Louisiana LNG was 28% complete.

As those projects come online, development spending will finish, and the earnings can start flowing, which will be felt in future years.

According to the projection on CommSec, the business is forecast to see earnings per share (EPS) of $2.184. That means it’s now valued at 15 times FY26’s estimated earnings.

FY27

The ASX energy share could see earnings increase in the 2027 financial year, which would be music to investors’ ears.

Its performance in FY27 could be dependent on whether normal energy flows out of the Middle East resume. There doesn’t seem to be an end in sight at this stage.

As I mentioned above, completed projects could be a boost for earnings in FY27 and beyond.

EPS is projected to rise by 21.3% to $2.649, implying it’s valued at 12 times FY27’s estimated earnings.

FY28

You’d hope that by 2028, the Middle East situation will have been resolved for some time. If it is, energy prices could be lower – that’d be good for virtually all Australians, but a headwind for Woodside’s earnings.

Energy prices will probably have a sizeable impact on the FY28 result, whatever is happening in that year.

According to the forecast on CommSec, Woodside’s EPS could decline by 5% to $2.52. That suggests the Woodside share price is valued at 13 times FY28’s estimated earnings.

Is the Woodside share price a buy?

With those future earnings in mind, let’s take a look at what experts think of the business.

According to CommSec’s collation of analyst opinions, there are currently six buy ratings, eight hold ratings, and three sell ratings on the business. That’s a bit of a mixed bag.

I try to invest in cyclical stocks (such as energy) when prices are low rather than high, as is the case now. Therefore, I’d look at other ASX share opportunities first.

The post Here’s the earnings forecast out to 2028 for Woodside shares appeared first on The Motley Fool Australia.

More reading

• Santos vs Woodside: Which ASX energy share is better value?
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• Woodside Energy vs Fortescue: Which ASX mining share is best for passive income?
• 5 things to watch on the ASX 200 on Thursday
• Woodside shares up 38% in 2026: Here’s what brokers tip next

Motley Fool contributor Tristan Harrison 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.

The S&P/ASX 200 Index (ASX: XJO) looked like it was heading for a decent Friday after a strong lead from Wall Street.

However, those early gains have now disappeared.

The ASX 200 is down 0.09% to 8,725 points in early afternoon trade, after reaching 8,771 earlier in the session.

That means the index has dropped almost 47 points from its morning high.

So, what’s dragging the market lower right now?

A decent lead from Wall Street

There was actually plenty going the ASX 200’s way before today’s market open.

Wall Street finished comfortably higher overnight, with the S&P 500 Index (SP: .INX) gaining 1.14% and the Nasdaq Composite Index (NASDAQ: .IXIC) jumping 1.69%.

The Dow Jones Industrial Average Index (DJX: .DJI) also climbed 0.61%.

Oil prices moved lower as well, with Brent crude falling 1.6% to US$103.92 a barrel for its second straight decline.

Meanwhile, the US 10-year Treasury yield dropped back below 5% to around 4.93%.

That helped the ASX 200 open higher and climb around 0.45% in early trade.

However, it appears attention has now shifted back to interest rates here in Australia.

Rates are back in focus

The RBA has been back in the spotlight today after Governor Michele Bullock appeared before a parliamentary committee.

According to Reuters, said some of the inflation risks the RBA had warned about were now starting to emerge.

She pointed to higher oil prices and the global AI investment boom as two areas putting more pressure on prices.

The RBA has already lifted rates 3 times this year, taking the cash rate to 4.35%, but another increase could be coming.

Markets are now pricing a 93% chance of another 25-basis-point hike at the RBA’s 29 September meeting.

This would take the cash rate to 4.60%.

Banks weigh down the index

The big banks are doing plenty of the damage today, with all four major lenders trading lower.

Commonwealth Bank of Australia (ASX: CBA) shares are down 1.16% to $152.23, while National Australia Bank Ltd (ASX: NAB) is 1.10% lower at $38.79.

Westpac Banking Corp (ASX: WBC) has fallen 0.89% to $34.52, and ANZ Group Holdings Ltd (ASX: ANZ) is down 0.50% to $37.59.

Interestingly, the market underneath is actually holding up reasonably well.

At the latest reading, 105 ASX 200 shares were higher, 92 were lower, and 3 were unchanged.

Foolish takeaway

Friday’s session has turned into another fairly choppy one for the ASX 200 after two consecutive gains.

The index is now down around 1.1% over the past week and 3.8% over the past month.

With the next RBA decision coming on 29 September, interest rates will be a hot topic over the next few sessions.

The post ASX 200 slips into the red after a positive start. Here’s why appeared first on The Motley Fool Australia.

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• Wall Street just shrugged off the Fed rate hike. Could the ASX 200 be next?
• 5 things to watch on the ASX 200 on Friday
• ASX shares investors are still buying despite volatility: survey
• ASX 200 rebounds from recent lows. Is this just another false start?

Motley Fool contributor Aaron Teboneras 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.