At current market price, TPL is selling for roughly $400 per acre. In my local (NJ) paper there is an add to buy land near El Paso for $175 per acre, financed by seller. This type of sales effort implies to me that the land must be worth less than half the $175.
Most of TPL's land is low value stuff like this. They have already sold off anything that was readily saleable.
So, why are people paying 3 to 4 times for TPL shares what the land is worth?
I generally love companies that buy their own shares back. In this case, however, it looks like TPL's stock buybacks have raised the market price to unrealistic levels.
It's not just the land that's valuable, but the oil and gas rights on the land (with Chevron etc.). Also, some of their land is in pretty good areas around Midland, Texas--not El Paso. Overall underlying value of land plus royalty rights, plus some grazing rights etc. is probably easily in $60 plus range. Happy holidays!
I have been a TPL shareholder for almost 20 years. It was explained to me a long time ago that with this company the actual value opf the land is unimportant, also the PE ratio is unimportant. As dictated by the court in the 1880's the trust must use any profits after taxes to either declare dividends or buy back their own stock. I was told by a reliable source that the company doesn't really want to sell land (only if someone twists their arms), as the land is more valuable as a working asset which earns and creates profits perpetually. It is the only company of its kind, and is a uniquely special stock holding for long term investors (I mean really long term!!!)