DCF Tool

TPL

Texas Pacific Land Corporation – Crude Petroleum and Natural Gas Extraction
texas pacific land trust was created in 1888 as a result of a reorganization of the texas and pacific railway company following receivership. holders of texas and pacific railway company bonds received 3.5 million acres of land in texas which had been earned by the railroad and pledged as security against bonds. the bondholders created the trust and converted bonds to shares of proprietary interest in the trust. the trust was created to manage and sell the land. today the trust is one of the largest landowners in texas with around 888,333 acres located in eighteen different counties. texas pacific land trust derives revenue from all avenues of managing the land, i.e. oil and gas royalties, grazing leases, easements, sundry and specialty leases, and land sales. the trust has a perpetual oil and gas royalty interest in some 459,200 acres.
Analysis Results
Intrinsic Value $3,831.43
Latest Price $1,859.43
Relative Value 51% undervalued
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Cash Flow (Billions)
Analysis Parameters
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Analysis Details
Growth Rate Projection

An exponential growth model was fit to the past cash flow data, giving more weight to more recent years. This model determined a growth rate estimate of 40.1%.

Weighted Average Cost of Capital (WACC)

The calculated WACC is 8.4%. This value is used as the default discount rate.

Value of Future Flows

Assuming a growth rate of 40.1%, the cash flows for the next 5 years are projected.

The present value of each year's flow is adjusted to present value using the discount rate.

Year Future flow (billion) Present value (billion)
2023 0.643 0.593
2024 0.901 0.766
2025 1.26 0.99
2026 1.77 1.28
2027 2.48 1.65
Terminal Value

Assuming a growth rate after the projection years of 2.0%, the terminal value of the company would be 39.2 billion. This corresponds to a present value of 24.1 billion.

Intrinsic Value Per Share

The total present value of the projected cash flows is 5.28 billion. Adding in the terminal value gives a total present value of 29.4 billion.

There are presently 7.68 million outstanding shares, so the intrinsic value per share is 3831.43.

Financial Statements

The following data was to determine the past cash flows.

Current Assets 633,401,000
Current Cash 510,834,000
Current Liabilities 39,595,000
Current Debt 0
Non-Cash Working Capital (NCWC) 82,972,000
Change in NCWC 35,601,000
EBIT 562,307,000
Tax Provision 122,493,000
Depreciation and Amortization 15,376,000
Capital Expenditure -19,212,000
Unlevered Free Cash Flow 472,988,997
Current Assets 526,513,000
Current Cash 428,242,000
Current Liabilities 50,900,000
Current Debt 0
Non-Cash Working Capital (NCWC) 47,371,000
Change in NCWC 37,606,000
EBIT 362,393,000
Tax Provision 93,037,000
Depreciation and Amortization 16,257,000
Capital Expenditure -15,548,000
Unlevered Free Cash Flow 307,830,923
Current Assets 335,713,000
Current Cash 281,046,000
Current Liabilities 44,902,000
Current Debt 0
Non-Cash Working Capital (NCWC) 9,765,000
Change in NCWC -11,385,000
EBIT 217,251,000
Tax Provision 43,613,000
Depreciation and Amortization 14,395,000
Capital Expenditure -5,086,000
Unlevered Free Cash Flow 172,040,694
Current Assets 366,640,000
Current Cash 303,645,000
Current Liabilities 41,845,000
Current Debt 0
Non-Cash Working Capital (NCWC) 21,150,000
Change in NCWC -11,517,000
EBIT 399,573,000
Tax Provision 83,527,000
Depreciation and Amortization 8,906,000
Capital Expenditure -32,209,000
Unlevered Free Cash Flow 281,782,908
Current Assets 177,795,000
Current Cash 119,647,000
Current Liabilities 25,481,000
Current Debt 0
Non-Cash Working Capital (NCWC) 32,667,000
Change in NCWC 61,527,000
EBIT 241,959,000
Tax Provision 52,014,000
Depreciation and Amortization 2,583,000
Capital Expenditure -47,878,000
Unlevered Free Cash Flow 210,109,794
Current Assets 98,987,000
Current Cash 79,580,000
Current Liabilities 48,267,000
Current Debt 0
Non-Cash Working Capital (NCWC) -28,860,000
Change in NCWC -20,581,022
EBIT 119,776,000
Tax Provision 43,499,000
Depreciation and Amortization 376,000
Capital Expenditure -18,747,000
Unlevered Free Cash Flow 37,355,462
Current Assets 55,968,318
Current Cash 49,417,889
Current Liabilities 14,829,407
Current Debt 0
Non-Cash Working Capital (NCWC) -8,278,978
Change in NCWC -7,816,098
EBIT 55,057,850
Tax Provision 17,847,370
Depreciation and Amortization 43,290
Capital Expenditure -976,871
Unlevered Free Cash Flow 28,470,219
Current Assets 48,799,503
Current Cash 45,011,969
Current Liabilities 4,250,414
Current Debt 0
Non-Cash Working Capital (NCWC) -462,880
Change in NCWC 836,434
EBIT 75,266,040
Tax Provision 25,244,515
Depreciation and Amortization 25,374
Capital Expenditure -221,456
Unlevered Free Cash Flow 50,667,571
Current Assets 30,850,716
Current Cash 26,814,759
Current Liabilities 5,335,271
Current Debt 0
Non-Cash Working Capital (NCWC) -1,299,314
Change in NCWC -2,271,442
EBIT 51,417,031
Tax Provision 16,666,534
Depreciation and Amortization 19,730
Capital Expenditure -53,788
Unlevered Free Cash Flow 32,449,703
Current Assets 16,964,746
Current Cash 13,239,211
Current Liabilities 2,753,407
Current Debt 0
Non-Cash Working Capital (NCWC) 972,128
Change in NCWC 297,043
EBIT 40,130,573
Tax Provision 12,924,070
Depreciation and Amortization 16,286
Capital Expenditure -54,610
Unlevered Free Cash Flow 27,469,087
Current Assets 11,542,644
Current Cash 8,424,907
Current Liabilities 2,442,652
Current Debt 0
Non-Cash Working Capital (NCWC) 675,085
Change in NCWC 1,273,146
EBIT 29,303,451
Tax Provision 9,675,068
Depreciation and Amortization 16,504
Capital Expenditure -50,405
Unlevered Free Cash Flow 20,874,040

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