We recently published a list of 15 Highest-Priced Stocks Right Now. In this article, we are going to take a look at where Texas Pacific Land Corporation (NYSE:TPL) stands against other Texas Pacific Land Corporation (NYSE:TPL).
2024 was a blockbuster year for the US markets, with the broad market index up 23.31% during the year, after rising 24.2% in the year prior. The two-year gain of 53% is the best performance for the index since the 66% rally between 1997 and 1998.
READ ALSO: 10 Best Single Digit Stocks To Buy Now and 12 Best S&P 500 Stocks to Invest in According to Analysts.
The market benefited from declining interest rates, waning inflation, and a resilient economy that avoided recession. While analysts have projected continued growth in 2025, they are also cautious about the rally having gone too far with a correction in the offing this year. Fears of fierce trade wars and geopolitical conflicts could also hurt the stock market.
Over the past few weeks, President Trump has announced and then delayed tariffs on Canada and Mexico, imposed additional 10% tariffs on Chinese goods, and warned the European Union of similar treatment, citing the bloc’s treatment of the U.S. The new administration’s protectionist policies have sparked concerns in the markets about which countries will be next on the American president’s list, leaving several large multinationals unsure of how to plan.
According to analysts at Goldman Sachs Research, index earnings could drop by 2-3% if the US goes ahead with its proposed tariffs. Financial markets have been turbulent amid ongoing tariff negotiations between Washington and its major trade partners. Here is what chief equity strategist, David Kostin, wrote in a recent report.
“If company managements decide to absorb the higher input costs, then profit margins would be squeezed. If companies pass along the higher costs to end customers, then sales volumes may suffer. Firms may try to push back on their suppliers and ask them to absorb part of the cost of the tariff through lower prices.”
Analysts at the investment banking firm have also warned that protectionist policies driving up the value of the U.S. Dollar could further pressure the earnings of several companies, especially those that derive a significant portion of their revenues outside the United States.
Time will tell whether the Trump administration implements the tariffs or reaches a compromise with its trade partners, and how the markets react if the export taxes are imposed. However, if past trends are anything to go by, the broad market index dropped by a total of 5% on days when the U.S., under Trump’s first stint as president, announced tariffs in 2018 and 2019. The index fell by a cumulative 7% when other countries imposed retaliatory tariffs.
Methodology
We went through screeners to identify the highest-priced stocks as of the close of the day on Friday, February 14, 2025 and ranked them in ascending order of their share price.
Why are we interested in the stocks that hedge funds pile into? The reason is simple: our research has shown that we can outperform the market by imitating the top stock picks of the best hedge funds. Our quarterly newsletter’s strategy selects 14 small-cap and large-cap stocks every quarter and has returned 275% since May 2014, beating its benchmark by 150 percentage points (see more details here).
Texas Pacific Land Corporation (NYSE:TPL)
Share Price on February 14: $1,372.40
Texas Pacific Land Corporation (NYSE:TPL) is one of the largest landowners in Texas, with approximately 900,000 acres of land in West Texas, much of it concentrated in the Permian Basin. The company generates most of its revenue from oil and gas royalties and water sales.
TPL has been actively increasing its acreage through strategic acquisitions. In October last year, it acquired 7,490 net royalty acres in the Midland Basin for $286 million. The acquired assets at the time of the deal completion had a per day production of around 1,300 barrels of oil equivalent. The acquisition is likely to further strengthen Texas Pacific Land Corporation (NYSE:TPL)’s cash flow and improve earnings.
Earlier in August, the company announced two acquisitions for surface acreage and oil and gas mineral interests in the Permian Basin for $169 million. The agreements are expected to boost Texas Pacific Land Corporation (NYSE:TPL)’s net revenue interest in oil and gas wells, and also enhance its revenue stream across water supplies.
The stock’s share price has surged by over 24% this year, resulting in TPL being one of the highest-priced stocks right now. The returns were driven by a strong performance in Q3 2024, which saw a 29% year-over-year increase in oil and gas royalty production and a 32% growth in water sales volume from last year. Texas Pacific Land Corporation (NYSE:TPL) also announced a 37% hike in its quarterly dividend.
According to Insider Monkey’s database for Q3 2024, 20 hedge funds held a stake in the company. Horizon Asset Management is the largest investor in the company, with holdings valued at over $3.98 billion as of December 31, 2024.
Overall, TPL ranks 12th on our list of highest-priced stocks right now. While we acknowledge the potential of conglomerate holding companies, our conviction lies in the belief that AI stocks hold greater promise for delivering higher returns, and doing so within a shorter timeframe. If you are looking for an AI stock that is more promising than TPL but that trades at less than 5 times its earnings, check out our report about the cheapest AI stock.
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Disclosure: None. This article is originally published at Insider Monkey.
