If oil stocks were contestants on Survivor, Texas Pacific Land would be the chill old guy sitting in the shade, watching ExxonMobil and Chevron do pushups in the sun, only to win immunity because his land literally has all the oil under it.

While the rest of the energy sector was out here sweating bullets through rate hikes and price swings, TPL just sat on 873,000 acres of Permian Basin real estate, collected rent, and watched its stock price double. That’s not hyperbole… TPL is up 121% over the past year, stomping the S&P 500’s cute little 5% gain and the energy sector’s weak 2% attempt at relevance.

Ironically, TPL doesn’t actually drill for oil. It lets other people do the dirty work and then takes a juicy cut. Think of TPL as the ultimate “asset-light” oil company. It owns the land (a ton of it) and makes money from the royalties, easements, leases, and water services tied to oil and gas production. It’s like owning the tollbooth on the road to Disney. Everyone else is digging… TPL’s just collecting fees.

In addition to the oil money, their water business is growing as well. In 2024, oil and gas royalties were up just 4.5% (still decent), but water sales were up over 30% year over year, hitting $254.8 million. 

As boring as it can be, let’s talk numbers. In Q4 2024, TPL made $118.4 million in net income… up from $106.6M in Q3. For the year, they made $705.8 million in revenue and a record $461 million in free cash flow. That’s a metric ton of money for a company that’s basically leasing sand in Texas.

But here’s something that made me do a double take: TPL’s operating expenses are comically low… which means most of that revenue turns into profit. On another interesting note: Murray Stahl, one of TPL’s directors, recently made 48 separate buys totaling over $100K… even as the stock dipped hard in early April. Either he’s averaging down like a pro or he knows something we don’t. Either way, that’s the kind of corporate confidence you like to see when the stock is trading at over $1,200 per share.

Now, let’s address the elephant riding a Cadillac through the desert… valuation. TPL is trading at 69x trailing earnings. That’s Tesla-level pricey… and Tesla actually builds stuff. As for dividends, TPL paid a record $13.51 per share in 2024, but with a 1% yield, it’s more of a “thanks for holding” than a huge reward for investors.

Texas Pacific Land is like the Dos Equis guy of energy stocks… doesn’t do much, but everything it does do makes money. It doesn’t pump oil. It doesn’t build pipelines. It just owns the land and lets the rest of the industry work for it.

Is it expensive? yes. But in an economic environment where oil is cyclical, and drilling is risky, TPL is the luxury real estate play of the energy world. A hedge against volatility. A royalty machine. A passive-aggressive landlord to Big Oil.

Stocks.News has positions in Texas Pacific Land, General Motors, Disney, Exxon Mobil, and Chevron.