(TPL) Texas Pacific Land Trust - Ratings and Ratios

Texas Pacific Land Corporation (TPL) is a leading player in land and resource management, as well as water services and operations, primarily within the Permian Basin, a key region for U.S. oil production. The companys Land and Resource Management segment manages over 900,000 surface acres, complemented by oil and gas royalty interests, including a 1/128th non-participating perpetual royalty interest (NPRI) on 85,000 acres and a 1/16th NPRI on 371,000 acres, alongside 16,000 net royalty acres. These NRIs provide a steady revenue stream, unaffected by operational costs. The segment also generates income through easements for oil, gas, and utility transport, and leases land for infrastructure like processing facilities and roads. Additionally, it sells materials such as caliche and sand, and engages in land sales.

The Water Services and Operations segment offers comprehensive water solutions, including sourcing, treatment, infrastructure development, and disposal, crucial for oil and gas operations, particularly in water-intensive processes like hydraulic fracturing. This segment also holds produced water royalties, enhancing its revenue diversity. Founded in 1888 and headquartered in Dallas, Texas, TPLs enduring presence underscores its strategic role in the energy landscape, leveraging its extensive land holdings and specialized services to support Permian Basin operations.

Looking ahead, TPLs stock is expected to show volatility within a range, potentially rebounding towards the 50-day SMA of 1317.66, supported by its strong fundamental position. However, the recent price dip below the 20-day SMA indicates short-term weakness. The high ATR of 84 signals significant price swings, advising traders to exercise caution. The forward P/E of 37.74 suggests market confidence in future growth, which may bolster the stock, despite current valuations appearing stretched with a P/B of 25.64. The outstanding return on equity of 40.09% highlights efficient equity use, potentially supporting long-term value.