Updated April 2025
Texas Pacific Land Corporation, or TPL, isn’t a household name, but in the investment world—particularly among those with an eye on long-term, cash-generating assets—it carries real weight. The company owns a vast amount of land in West Texas, especially in the resource-rich Permian Basin. But instead of drilling for oil or setting up rigs, TPL profits from others who do. It collects royalties, sells water, and grants easements to operators who pay handsomely to tap into the land’s natural resources.
That setup means TPL doesn’t have the heavy costs and risks that come with oil exploration, yet it still benefits directly when production activity picks up. For dividend investors, that kind of model—low operating cost, high margin, steady income—is always worth a closer look.
Recent Events
The past year has been an eventful one for TPL. The company recently completed a 3-for-1 stock split at the end of March 2024. While stock splits don’t change the business fundamentals, they often make the shares more accessible to a wider range of investors. Judging by the performance since the split, the move hasn’t slowed TPL’s momentum. Over the last 12 months, the stock has soared more than 130%, a rise that speaks volumes about investor confidence and broader trends in the energy market.
Looking at its financials, TPL posted a solid 11.5% jump in revenue year-over-year in its latest quarter. Even more impressive, it maintained a sky-high profit margin of over 64% and an operating margin of nearly 80%. When you consider how many companies are struggling to manage rising costs and thinner margins, TPL stands out for its operational efficiency.
Earnings growth was a modest 4.6% over the previous year, but that steady climb, combined with very little debt and a fat cash cushion, keeps the company in a strong position.
Key Dividend Metrics
📈 Forward Dividend Yield: 0.47%
💵 Forward Annual Dividend Rate: $6.40 per share
📊 Trailing Dividend Yield: 0.39%
🧮 5-Year Average Dividend Yield: 0.82%
🧾 Payout Ratio: 25.9%
📅 Dividend Date: March 17, 2025
📆 Ex-Dividend Date: March 3, 2025
🧨 Most Recent Stock Split: 3-for-1 on March 27, 2024
Dividend Overview
If you’re scanning for high dividend yields, TPL probably won’t jump out at you. The forward yield is just under half a percent, and even its five-year average yield barely cracks the 1% mark. But numbers alone don’t always tell the full story. This is a business that prioritizes sustainability and shareholder flexibility over headline-grabbing payouts.
TPL’s base dividend is fairly conservative, but the company supplements it with occasional special dividends. These bonus payments usually happen when cash levels swell and capital needs are minimal. Because the company doesn’t need to reinvest heavily into operations—it’s not building out rigs or financing exploration—it can return more to shareholders when conditions are right.
It also helps that the payout ratio is quite low. At just under 26%, the dividend is well-covered by earnings, leaving plenty of room for potential increases down the road or special payouts if cash continues to build. This measured approach means investors aren’t likely to see big cuts if commodity prices dip. And when times are good, TPL has the balance sheet to share the wealth.
Dividend Growth and Safety
While the yield is modest, TPL has a track record of growing its dividend over time, though not necessarily on a fixed annual schedule. The increases tend to follow the company’s earnings and cash flow, which makes sense for a business so closely tied to energy production trends in the Permian.
Even with the ups and downs of oil prices, TPL has remained impressively profitable. The company’s revenue streams are recurring, and it doesn’t face the same kind of capex pressures that plague other energy names. Add to that the fact that it has almost no debt—just over a million dollars total—and you get a level of dividend safety that few in the sector can match.
Its cash position is strong, with more than $369 million on the books. That gives it plenty of cushion to support the dividend, even if operating cash flow were to take a temporary hit. Speaking of cash flow, TPL generated nearly $491 million in operating cash over the trailing twelve months, a healthy figure. Though the levered free cash flow was slightly negative recently, that’s not cause for alarm considering the company’s cash stockpile and the flexibility it enjoys due to its minimal debt load.
For dividend-focused investors who value safety and longevity over short-term income, TPL brings a lot to the table. The payout is modest, yes—but it’s built on rock-solid fundamentals. The business is lean, the margins are elite, and management has consistently shown a willingness to reward shareholders while keeping risk in check.
So, while TPL might not deliver jaw-dropping quarterly income, its long-term dividend prospects look durable. The focus here isn’t on stretching to impress in the near term—it’s on managing the business in a way that preserves and grows value for the long haul. And in a world where steady, well-covered dividends are becoming harder to find, that’s a story that’s well worth listening to.
Chart Analysis
Overall Trend and Price Structure
The chart shows a strong and sustained uptrend that began around late spring and continued into early winter, culminating in a sharp price spike toward the end of the year. This was followed by a steep pullback from the highs, with price finding a new range and consolidating from early January through March. That initial rally phase looks like a classic markup period—strong directional movement with momentum behind it, fueled by increasing investor interest and likely supported by rising fundamentals.
Since then, price action has cooled. What we’re seeing now resembles a sideways consolidation after a euphoric peak. Price has been moving in a relatively tight range, forming a base just under the previous highs, suggesting a shift from aggressive buying to a more cautious environment where participants are digesting previous gains.
Moving Averages and Momentum
The 50-day moving average (in red) flattened out in January and is now almost horizontal, which reflects the loss of strong upward momentum. It’s currently hovering around the price action, acting as a soft ceiling. The 200-day moving average (in blue), however, is still steadily climbing, showing that the longer-term trend remains intact and supportive.
Price staying above the 200-day average is a positive sign. Even though there’s been some choppy behavior, the structure hasn’t broken down. That said, the failure to retest the prior peak with conviction in recent weeks shows a lack of urgency from buyers. For a fresh leg up, price would likely need to clear the 50-day average and hold above it with increasing volume.
Volume Activity
Volume has remained mostly muted during the recent consolidation, which isn’t unusual after a big run. The few volume spikes we do see are isolated and didn’t significantly disrupt the overall pattern. There’s no major sign of distribution or panic selling, which implies holders aren’t rushing for the exits. But we’re also not seeing heavy accumulation, suggesting market participants are taking a wait-and-see approach.
One large spike in December stands out—likely event-driven—and since then, volume has normalized. That kind of volume blowoff often marks a local top, which seems to be the case here, followed by the cooling-off period we’re witnessing now.
RSI and Market Psychology
The Relative Strength Index (RSI) moved into overbought territory a couple of times during the big move up but has been sitting in a neutral to slightly bearish zone since January. For the past two months, RSI has been stuck around the 40–50 range, which often reflects indecision or mild profit-taking. The absence of strong momentum signals aligns with the broader consolidation pattern.
What’s encouraging is that RSI hasn’t dropped into the oversold zone during this stretch. That tells us that while buyers aren’t in control, there’s no meaningful weakness or exodus either. It’s a chart that reflects stability after a massive run, not a reversal.
Candle Behavior and Current Position
Zooming into the last five candles, we see a lot of wicks—both upper and lower—indicating indecision. These candles aren’t making decisive moves in either direction, which typically shows a balance of power between buyers and sellers. The market is pausing, not breaking down. Some of the upper wicks suggest sellers stepping in on intraday strength, while the lower wicks imply support kicking in at dips.
This kind of price behavior often signals a buildup to something more directional. Whether that means a breakout or breakdown depends on what side steps in with more conviction.
Final Take on Structure
From a structural standpoint, this chart looks like a textbook pause after a massive advance. The uptrend has not been violated. Long-term strength remains visible, anchored by the 200-day moving average that’s steadily rising. Price hasn’t made a lower low since pulling back from the December peak, and that matters.
Right now, the stock is in a sideways range—a resting phase. It’s not in decline, and it’s not overheating. It’s just catching its breath after running hard. That kind of setup doesn’t require urgency but does benefit from patience. If it can hold this range and volume starts to increase on the upside, that would be a constructive sign that the next move is starting to form.
Balance Sheet Analysis
Texas Pacific Land Corporation doesn’t just keep it simple in operations—it does the same on its balance sheet. As of the end of 2024, TPL shows total assets of just over $1.24 billion, marking a steady climb from previous years and nearly doubling its position since 2021. What’s more eye-catching is how little baggage it carries. Liabilities are comically low at just $115 million, and total debt? A mere $453,000. That’s not a typo—it’s less than the cost of a small house in a hot real estate market. Clearly, TPL isn’t a fan of owing money.
Equity has also seen strong growth, climbing from $651 million in 2021 to over $1.13 billion in 2024. Most of that growth is driven by retained earnings and land value appreciation rather than aggressive share issuance, which investors can appreciate. With working capital at a healthy $443 million, the company isn’t just well-positioned to meet its obligations—it’s practically lounging in a cash cushion. And with tangible book value keeping pace with total equity, there are no smoke-and-mirrors games here—just land, cash, and an ultra-clean balance sheet that reflects the quiet strength of TPL’s asset-light model.
Cash Flow Statement
Texas Pacific Land Corporation continues to generate strong operating cash flow, pulling in nearly $491 million over the trailing twelve months. That’s up from around $418 million the year prior and reflects steady income from its royalty-based model. This kind of consistency isn’t easy to find, especially with minimal debt and no reliance on outside financing. However, a sharp uptick in capital expenditures—jumping to over $425 million—put pressure on free cash flow, which narrowed to just $65 million.
The cash outflows on the investing side suggest some unusual activity this past year, likely one-time in nature. Financing cash flow also saw a significant outlay at $378 million, mostly from share repurchases rather than anything involving debt. There was no new debt issued, no repayment, and no interest paid—because there’s virtually no debt to begin with. Despite this heavier spending, TPL still closed the period with a healthy $371 million in cash, proving that even when it decides to spend, it does so with a full wallet and a level head.
Analyst Ratings
📈 Texas Pacific Land Corporation (TPL) has seen some movement in analyst sentiment recently, though the stock still flies under the radar for many. As of April 1, 2025, it’s trading at $1,352.84. The latest notable rating came from BWS Financial, which maintained a “Buy” stance back in August 2024 and issued a price target of $917.00. Interestingly, that target now sits well below the current share price, suggesting the stock has outpaced expectations by a wide margin. The reasoning behind the bullish view was rooted in TPL’s unmatched land position in the Permian Basin and its steady income from royalties, water rights, and surface leases.
🛑 On the other side of the table, Stifel Nicolaus held firm on a “Hold” rating earlier in the year, trimming their price target from $519.33 to $471.33. That kind of caution typically hints at concerns over valuation or perhaps expectations for oil price volatility, both of which could influence future cash flow projections. Despite the price appreciation, some analysts clearly remain wary of how much further the current fundamentals can stretch in the near term.
🎯 The current consensus price target among analysts stands at $1,300.00, just slightly below where the stock is trading. That paints a picture of a stock that’s well-regarded but also viewed as fairly valued after its massive run-up. For now, sentiment is positive but not euphoric—analysts seem impressed by the business model but cautious on pricing in too much future upside.
Earning Report Summary
A Strong Finish to 2024
Texas Pacific Land Corporation wrapped up the year with some solid numbers that grabbed attention for all the right reasons. Net income for the fourth quarter came in at $118.4 million, which was a noticeable bump from the previous quarter. Earnings per share landed at $5.14, beating expectations and adding a bit of extra shine to an already strong performance. Revenue for the quarter hit $185.8 million, up about 11% compared to the same period last year.
One of the standout stories was in the company’s water business. Water sales climbed to $36.7 million, which is a 39% jump—no small feat. Produced water royalties weren’t far behind, rising 25% to hit $28.1 million. That kind of growth shows how TPL’s efforts to expand beyond just oil and gas royalties are paying off. The water segment is clearly becoming a meaningful part of the overall picture.
Annual Highlights and What’s Next
For the full year, the numbers continued to impress. TPL’s share of oil and gas production averaged 26.8 thousand barrels of oil equivalent per day—up from 23.5 thousand the year before. Water sales volumes were also up, rising 31%, and full-year revenue reached $705.8 million, setting a new high for the company.
Financially, the company is sitting in a very comfortable position. There’s no debt, and cash reserves at the end of the year were around $370 million. Free cash flow hit $461 million, up 11% year over year. That gives the company plenty of flexibility to make moves without relying on outside funding.
Looking ahead, management has its sights on building that cash pile even higher, with a $700 million target. They also announced a nice bump to the regular dividend, increasing it by 37% to $1.60 per share. There’s also chatter about potential deals—TPL is looking at merger and acquisition opportunities tied to minerals, royalties, water, and land in the Permian Basin.
All in all, it was a year of strong execution and strategic positioning. The company seems to be playing the long game—and playing it well.
Management Team
Texas Pacific Land Corporation (TPL) is led by a tight-knit executive group that brings a deep bench of experience in land, legal, and energy-related operations. At the top is Tyler Glover, who serves as President and CEO. He’s been instrumental in sharpening the company’s strategic focus, pushing forward its revenue diversification efforts and capital discipline. Chris Steddum holds the CFO role, keeping the financials not just in check, but in standout shape. His conservative, cash-conscious approach has helped maintain the company’s rock-solid balance sheet.
The legal and governance side is covered by Michael W. Dobbs, who wears multiple hats as Senior Vice President, Secretary, and General Counsel. His deep knowledge of mineral rights and land management provides a steady hand on regulatory and compliance matters. The accounting side is run by Stephanie Buffington, whose attention to financial reporting ensures accuracy and clarity in TPL’s disclosures. Jeremy Smith, Vice President of Business Development, and Katie Keenan, Vice President and Assistant General Counsel, round out the leadership team. Their roles in strategy and legal oversight keep the company aligned and forward-looking.
Valuation and Stock Performance
TPL’s share price has been on an impressive run, up over 130% in the past year. That kind of move doesn’t go unnoticed, and it reflects a growing appreciation for the business model and its cash-generating ability. As of early April 2025, shares are trading at $1,352.84. Even after that rally, the stock sits just under 24% off its 52-week high of $1,769.14. In other words, it’s cooled off a bit, but the overall trend is still pointing north.
Looking at the valuation, this is definitely not a cheap stock. The P/E ratio clocks in around 68.6, which suggests investors are willing to pay a hefty premium for the company’s earnings. That premium is echoed in other metrics as well—price-to-sales is over 44, and price-to-book stands near 27. These figures paint the picture of a company that’s priced for quality and scarcity, rather than value in the traditional sense. Investors are betting on the unique nature of TPL’s land-based business, which operates without the heavy capex needs that usually come with energy exposure.
Risks and Considerations
Despite all the positives, TPL is not without its set of risks. One of the biggest is its dependence on oil and gas royalties. When commodity prices swing, so does royalty revenue. Natural gas, in particular, has been volatile at regional hubs, and that can impact short-term results even if long-term fundamentals remain intact.
Environmental concerns also sit close to the surface. TPL operates heavily in West Texas, where water scarcity and drought are recurring issues. That’s especially relevant given the company’s growing water services segment. If groundwater levels drop or aquifers become stressed, it could crimp future water sales or require costlier mitigation efforts.
Then there’s valuation risk. With TPL trading at premium levels, any earnings miss or pullback in royalty volumes could lead to a quick shift in sentiment. The company also operates in a fairly concentrated geographic area—most of its holdings are tied to the Permian Basin. That lack of diversification might not be a problem during boom times, but it can become one if local production activity slows down or regulatory hurdles arise.
Final Thoughts
TPL continues to stand out for its simplicity and profitability. The company generates revenue without drilling, builds value without debt, and returns capital without fuss. It’s a land-first business in an energy-dominated world, and that sets it apart. The management team appears focused and disciplined, avoiding unnecessary risks and sticking to a business model that has worked for generations.
But like any stock trading at a premium, expectations are high. Any slip—whether from market conditions or internal challenges—can carry extra weight. Still, it’s not every day you find a company with this kind of asset base, this kind of margin profile, and this kind of consistency. The appeal is obvious. What comes next, as always, depends on execution and a bit of patience.