Santos and Transurban: Two ASX Stocks With Contrasting Debt Profiles

Santos Ltd and Transurban Group reported contrasting financial metrics in their latest filings, offering a snapshot of two very different capital structures on the ASX. Santos, one of Australia's largest oil and gas companies, posted a debt-to-equity ratio of 43% for calendar 2024. That ratio indicates the company carries more equity than debt. Transurban, the toll-road operator with 22 urban motorways across Australia, Canada and the United States, reported a debt-to-equity ratio of 175.1% for its fiscal 2024 year. The difference reflects each company's stage and business model. Santos is a mature energy producer that generates steady cash flow from its oil and gas fields. Transurban relies on debt to fund new road projects, which it pays back through toll revenue over decades.

Santos reported a return on equity of 8.2% for calendar 2024. Rask Media notes that for mature businesses, ROE above 10% is often considered a benchmark. The company's average dividend yield over the last five years came in at 4.6% per year. Santos has committed to net-zero Scope 1 and 2 emissions by 2040, though Scope 3 emissions, which account for over 75% of its total, are excluded from that target. The company has faced legal challenges from the ACCR over alleged greenwashing.