10Y annualized return is
excellent
at 38.8% per year
TPL has met or exceeded earnings expectations in
few
recent quarters (0/2)
Strong Gross Profit Margin
High Return on Equity
Strong Operating Profit Margin
Minimal Debt Levels
Strong Liquidity Ratios
📈 Record Performance
💰 Strong Shareholder Returns
🌍 Strategic Acquisitions
🚀 Growth Opportunities in the Permian
🔋 Innovations in Water Management
📊 Robust M&A Pipeline
High Price-to-Earnings Ratio
Elevated Price-to-Sales Ratio
High P/FCF Ratio
Lack of Interest Coverage
Overall, TPL demonstrates a solid business quality with strong performance metrics and strategic positioning, alongside promising future prospects driven by innovation and growth opportunities in the Permian and water management sectors.
Analysis Date: February 20, 2025
Last Updated: March 12, 2025
Past performance does not guarantee future results. The data presented is indicative and may not be updated in real-time.
Texas Pacific Land Corporation (TPL) manages a large amount of land in Texas, around 880,000 acres. They earn money by leasing this land for activities like oil and gas production, as well as for power lines and roads. Additionally, they provide water services to companies in the oil industry, helping them with the water they need for their operations. Founded in 1888, TPL is based in Dallas, Texas, and plays an important role in the energy sector.
Streams of revenue
Core Products
Business Type
Business to Business
Competitive Advantages
Key Business Risks
Latest News
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DALLAS--(BUSINESS WIRE)--Texas Pacific Land Corporation Sets Dates for First Quarter 2025 Earnings Release and Conference Call.
Trailing Twelve Months (TTM) values provide a view of the company's performance over the last year.
Benjamin Graham's value investing approach focuses on finding stocks with a significant margin of safety between their intrinsic value and market price.
Intrinsic Value
Estimated fair value based on Graham's formula
$760.35
Current Market Price: $1078.93
IV/P Ratio: 0.70x (>1.0 indicates undervalued)
Margin of Safety
Gap between intrinsic value and market price
-42.0%
Graham recommended a minimum of 20-30% margin of safety
Higher values indicate a greater potential discount to fair value
Graham Criteria Checklist
Benjamin Graham's value investing checklist for TPL
Positive earnings (5+ years)
Dividend history (5+ years)
P/E ratio ≤ 20 (54.64)
P/B ratio ≤ 1.5 (21.90)
Current ratio ≥ 2.0 (8.33x)
Long-term debt < Net current assets (0.00x)
Margin of safety (-42.0%)
TPL does not meet all Graham criteria
Trailing Twelve Months (TTM) values provide a view of the company's performance over the last year.
Profitability metrics measure a company's ability to generate earnings relative to its revenue, operating costs, and other relevant metrics. Higher values generally indicate better performance.
Return on Equity (ROE)
Measures how efficiently a company uses its equity to generate profits
40.23%
Higher values indicate better returns for shareholders
TTM (as of 2025-04-30)
Gross Profit Margin
Percentage of revenue retained after accounting for cost of goods sold
90.74%
Higher values indicate better efficiency in production
TTM (as of 2025-04-30)
Net Profit Margin
Percentage of revenue retained after accounting for all expenses
64.32%
Higher values indicate better overall profitability
TTM (as of 2025-04-30)
With a return on equity (ROE) of 40.23%, the company demonstrates strong efficiency in generating profits from shareholders' equity.
The operating profit margin of 76.38% indicates that the company retains a significant portion of revenue as profit after covering operating expenses.
The price-to-free cash flow (P/FCF) ratio of 470.04 suggests that the stock may be overvalued in terms of its cash generation capabilities.
Financial health metrics assess a company's ability to meet its financial obligations and its overall financial stability.
Debt to Equity Ratio
Total debt divided by total equity
0.00x
Lower values indicate less financial leverage and risk
Less than 1.0 is conservative, 1.0-2.0 is moderate, >2.0 indicates high risk
Q4 2024
Current Ratio
Current assets divided by current liabilities
8.33x
Higher values indicate better short-term liquidity
Less than 1.0 is concerning, 1.0-2.0 is adequate, greater than 2.0 is good
Q4 2024
The debt-to-equity ratio of 0.0004 indicates the company has extremely low levels of debt, enhancing its financial stability.
The current ratio of 8.33 and quick ratio of 8.33 signify that the company has ample liquidity to meet short-term obligations.
An interest coverage ratio of 0.0 indicates that the company currently does not have enough earnings to cover its interest expenses, which could be a concern if debt levels increase.
Meeting Expectations
Higher values indicate better execution and credibility
Recent Results
EPS
TPL set records across key operating drivers, including a 14% increase in oil and gas royalty production volumes and a 31% increase in water sales volumes year-over-year. This demonstrates strong operational efficiency and demand for their services.
In 2024, TPL returned a record $376 million to shareholders through dividends and buybacks, highlighting a commitment to returning capital and a strong financial position.
TPL acquired over $400 million of high-quality Permian mineral and royalty assets, enhancing their growth potential and market position.
Despite a decline in rig counts, TPL expects continued growth in Permian production, driven by increased efficiencies and a healthy inventory of drilled but uncompleted wells (DUCs).
TPL is advancing in produced water desalination technology, with a test facility under construction and plans for beneficial reuse initiatives, positioning them well for future growth in the water sector.
The company sees ample opportunities for acquisitions in the fragmented market of oil and gas royalties and surface assets, suggesting a proactive approach to growth.