Buffett Brain · Research note
Score updated 26 Sept 2026 · analysis from 27 Jul 2026
TPL· Energy
Texas Pacific Land
Texas Pacific Land Corporation boasts high profitability and strong ROIC, but its valuation raises concerns about future returns.
Buffett fit
Strong fit
Owner
100
Durability
95
Management
85
Price
0
Score updated 26 Sept 2026 · analysis from 27 Jul 2026
Buffett's checklist
Each number against Buffett's bar, and where it ranks among Energy stocks in our database.
How much profit the business makes on each dollar invested in it. Higher is better.
What is left of each sale after the cost of making the product. A high number often means pricing power.
The cash the business earns for its owners, compared with the price of the whole company.
How fast sales grew each year over the last five years.
How many years of today's profit you pay for at today's price. Lower means cheaper.
How much the company owes compared with what it owns outright. Lower is safer.
The four pillars
How the business measures up on each of Buffett's four tests.
If I owned Texas Pacific Land Corporation outright, I would focus on maximizing the value of the land and resources over the next decade.
The full reasoning comes with a free account.
The 10-year test shows strong durability, with all five years of profitability and a max EPS decline of only -8.67%.
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Management has shown discipline with a share count CAGR of -0.29%, indicating or minimal dilution.
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The current yield of 1.78% is far below my target of 8-10%.
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- The full reasoning behind all four pillars
- The 5-year price target and the return it implies
- What would change the call
- Graham, Lynch and Greenblatt on the same stock
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For and against
The strongest points on each side, with the numbers behind them.
In its favor
5- 1 of 29.83% significantly exceeds the sector top-quintile cutoff of 11.7%.
- 2 stands at 97.7%, well above the sector average of 50.4%.
- 3 of 74.4% is in the top quintile for the sector.
- 4Net debt/EBITDA of -0.33 indicates a strong cash position.
Concerns
5- 1 of 54.4 indicates a high valuation that may not be sustainable.
- 2 yield of 1.78% is significantly below the desired 8-10%.
- 3 yield of only 0.15% raises questions about efficiency.
- 4If compress below 90%, the thesis could weaken.
Price history
$344+144.8%· 5-year return
Weekly closing prices. Touch or hover the line for a date.
The business
How the business works
Texas Pacific Land Corporation operates in land and resource management, managing about 880,000 acres. It generates revenue through oil and gas royalties, commercial leases, and water services, with TTM revenue reaching $798.19 million. The business model is highly profitable, evidenced by a 97.7% .
How this analysis has moved
The call has held across 5 reviews.
Sep 27, 2026 → Oct 21, 2026
What other investors would say
The same company, judged by three other documented playbooks.
Keep researching
Similar companies in Energy
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