Texas Pacific Land: 17% Of My Portfolio, And I’m Not Done Buying

Texas Pacific Land Corporation (TPL) has steadily become one of the most attractive investment opportunities in my portfolio. Currently, it represents 17% of my total holdings, and I remain bullish on its long-term potential. This article will delve into the key reasons why I continue to accumulate shares and why I believe TPL offers unparalleled value in today’s market.

Why Texas Pacific Land?

1. Unique Business Model

TPL operates as a landowner with extensive mineral rights across Texas. Unlike traditional oil and gas companies, TPL benefits from royalties without the need for costly exploration and drilling operations.

2. Strong Financial Performance

• Consistently high profit margins.
• Minimal debt, ensuring financial stability.
• Growing revenue driven by increased oil and gas production in the Permian Basin.

3. Rising Energy Demand

With global energy consumption on the rise, TPL remains well-positioned to capitalize on increasing production and infrastructure development in Texas.

Recent Performance and Market Trends

• Stock Price Movement: TPL has outperformed broader market indices in recent years, reflecting investor confidence in its long-term growth potential.
• Dividend Growth: Consistent dividend increases add to its appeal as a wealth-building investment.
• Institutional Interest: Increasing attention from hedge funds and institutional investors highlights the stock’s attractiveness.

Why I’m Still Buying

1. Scarcity Value: The limited nature of TPL’s land holdings ensures its long-term appreciation potential.
2. Inflation Hedge: With rising inflation, land and commodity-based investments serve as effective hedges.
3. Capital Appreciation: Continued growth in the Permian Basin suggests further stock appreciation potential.

Risks to Consider

While TPL presents a compelling investment case, some risks include:

• Commodity Price Volatility: Oil and gas price fluctuations can impact revenue.
• Regulatory Risks: Changes in environmental policies could affect operations.
• Liquidity Constraints: With limited share float, volatility can be higher than other large-cap stocks.

Texas Pacific Land remains a cornerstone of my portfolio, and I plan to continue adding to my position. With a unique business model, financial strength, and increasing market relevance, TPL offers a rare combination of growth and stability. As long as the fundamental outlook remains strong, I see no reason to stop buying.