Return on Equity (ROE)
since 2005
Calculation
Texas Pacific Land Corp., ROE, long-term trends, calculation
| ROE | = | 100 | × | Net income1 | ÷ | Total equity1 | |
|---|---|---|---|---|---|---|---|
| Dec 31, 2023 | 38.88% | = | 100 | × | 405,645) | ÷ | 1,043,196) |
| Dec 31, 2022 | 57.75% | = | 100 | × | 446,362) | ÷ | 772,887) |
| Dec 31, 2021 | 41.43% | = | 100 | × | 269,980) | ÷ | 651,711) |
| Dec 31, 2020 | 36.28% | = | 100 | × | 176,049) | ÷ | 485,184) |
| Dec 31, 2019 | 62.23% | = | 100 | × | 318,728) | ÷ | 512,137) |
| Dec 31, 2018 | 85.71% | = | 100 | × | 209,736) | ÷ | 244,691) |
| Dec 31, 2017 | 96.42% | = | 100 | × | 76,361) | ÷ | 79,193) |
| Dec 31, 2016 | 78.20% | = | 100 | × | 37,240) | ÷ | 47,624) |
| Dec 31, 2015 | 109.52% | = | 100 | × | 50,039) | ÷ | 45,689) |
| Dec 31, 2014 | 130.11% | = | 100 | × | 34,765) | ÷ | 26,720) |
| Dec 31, 2013 | 151.81% | = | 100 | × | 27,219) | ÷ | 17,930) |
| Dec 31, 2012 | 125.98% | = | 100 | × | 19,648) | ÷ | 15,596) |
| Dec 31, 2011 | 100.23% | = | 100 | × | 20,595) | ÷ | 20,547) |
| Dec 31, 2010 | 61.79% | = | 100 | × | 11,309) | ÷ | 18,302) |
| Dec 31, 2009 | 35.09% | = | 100 | × | 6,914) | ÷ | 19,704) |
| Dec 31, 2008 | 46.50% | = | 100 | × | 10,940) | ÷ | 23,525) |
| Dec 31, 2007 | 33.15% | = | 100 | × | 8,250) | ÷ | 24,890) |
| Dec 31, 2006 | 47.34% | = | 100 | × | 11,570) | ÷ | 24,439) |
| Dec 31, 2005 | 34.59% | = | 100 | × | 8,513) | ÷ | 24,614) |
Based on: 10-K (reporting date: 2023-12-31), 10-K (reporting date: 2022-12-31), 10-K (reporting date: 2021-12-31), 10-K (reporting date: 2020-12-31), 10-K (reporting date: 2019-12-31), 10-K (reporting date: 2018-12-31), 10-K (reporting date: 2017-12-31), 10-K (reporting date: 2016-12-31), 10-K (reporting date: 2015-12-31), 10-K (reporting date: 2014-12-31), 10-K (reporting date: 2013-12-31), 10-K (reporting date: 2012-12-31), 10-K (reporting date: 2011-12-31), 10-K (reporting date: 2010-12-31), 10-K (reporting date: 2009-12-31), 10-K (reporting date: 2008-12-31), 10-K (reporting date: 2007-12-31), 10-K (reporting date: 2006-12-31), 10-K (reporting date: 2005-12-31).
1 US$ in thousands
The financial trajectory from 2005 to 2023 is characterized by an initial period of high operational efficiency followed by a massive expansion of the capital base. While both net income and total equity have grown substantially in absolute terms, the relationship between them has shifted, resulting in a normalization of the return on equity (ROE) after a period of extreme peaks.
- Net Income Evolution
- Net income demonstrated a steady upward trajectory from 2005 to 2017, rising from 8.5 million to 76.3 million. A significant acceleration occurred starting in 2018, with earnings leaping to 209.7 million and peaking at 446.3 million in 2022. This represents a fundamental shift in the scale of profitability, moving from tens of millions to hundreds of millions of dollars annually.
- Equity Base Expansion
- Total equity remained relatively stagnant between 2005 and 2014, fluctuating within a narrow range of approximately 15 million to 45 million. However, a period of aggressive capital accumulation began in 2018, where equity surged from 244.6 million to 1.04 billion by 2023. The growth of the equity base in the latter five years of the period has been exponential compared to the first decade.
- Return on Equity (ROE) Trends
- The ROE exhibited a distinct bell-shaped curve over the long term. It climbed from 34.59% in 2005 to a peak of 151.81% in 2013. This exceptional performance was driven by net income growth that far outpaced the growth of the equity base. Following 2013, a consistent downward trend is observed, with ROE declining to 38.88% by 2023. This decline is not indicative of falling profits, but rather a mathematical result of the equity base growing at a faster rate than net income during the 2018-2023 expansion phase.
- Comparative Analysis of Growth Phases
- Two distinct financial regimes are evident. The first regime (2005-2017) was characterized by lean equity and high percentage returns, where small increases in equity supported significant ROE gains. The second regime (2018-2023) is characterized by massive scaling; although net income reached record highs, the proportional increase in total equity led to a compression of the ROE, returning the ratio to levels similar to those seen in the mid-2000s.
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Comparison to Competitors
Texas Pacific Land Corp., ROE, long-term trends, comparison to competitors
| Texas Pacific Land Corp. | Chevron Corp. | ConocoPhillips | ExxonMobil Holdings Corp. | |
|---|---|---|---|---|
| Dec 31, 2023 | 38.88% | 13.28% | 22.23% | 17.58% |
| Dec 31, 2022 | 57.75% | 22.27% | 38.91% | 28.58% |
| Dec 31, 2021 | 41.43% | 11.24% | 17.79% | 13.67% |
| Dec 31, 2020 | 36.28% | -4.21% | -9.05% | -14.28% |
| Dec 31, 2019 | 62.23% | 2.03% | 20.55% | 7.48% |
| Dec 31, 2018 | 85.71% | 9.59% | 19.59% | 10.87% |
| Dec 31, 2017 | 96.42% | 6.21% | -2.79% | 10.50% |
| Dec 31, 2016 | 78.20% | -0.34% | -10.34% | 4.69% |
| Dec 31, 2015 | 109.52% | 3.00% | -11.14% | 9.45% |
| Dec 31, 2014 | 130.11% | 12.41% | 13.23% | 18.65% |
| Dec 31, 2013 | 151.81% | 14.37% | 17.58% | 18.72% |
| Dec 31, 2012 | 125.98% | 19.18% | 17.56% | 27.06% |
| Dec 31, 2011 | 100.23% | 22.16% | 19.07% | 26.59% |
| Dec 31, 2010 | 61.79% | 18.10% | 16.57% | 20.74% |
| Dec 31, 2009 | 35.09% | 11.41% | 7.78% | 17.44% |
| Dec 31, 2008 | 46.50% | 27.62% | -30.81% | 40.03% |
| Dec 31, 2007 | 33.15% | 24.24% | 13.36% | 33.35% |
| Dec 31, 2006 | 47.34% | 24.86% | 18.82% | 34.70% |
| Dec 31, 2005 | 34.59% | 22.50% | 25.66% | 32.50% |
Based on: 10-K (reporting date: 2023-12-31), 10-K (reporting date: 2022-12-31), 10-K (reporting date: 2021-12-31), 10-K (reporting date: 2020-12-31), 10-K (reporting date: 2019-12-31), 10-K (reporting date: 2018-12-31), 10-K (reporting date: 2017-12-31), 10-K (reporting date: 2016-12-31), 10-K (reporting date: 2015-12-31), 10-K (reporting date: 2014-12-31), 10-K (reporting date: 2013-12-31), 10-K (reporting date: 2012-12-31), 10-K (reporting date: 2011-12-31), 10-K (reporting date: 2010-12-31), 10-K (reporting date: 2009-12-31), 10-K (reporting date: 2008-12-31), 10-K (reporting date: 2007-12-31), 10-K (reporting date: 2006-12-31), 10-K (reporting date: 2005-12-31).
Comparison to Sector (Oil, Gas & Consumable Fuels)
Texas Pacific Land Corp., ROE, long-term trends, comparison to sector (oil, gas & consumable fuels)
| Texas Pacific Land Corp. | Oil, Gas & Consumable Fuels | |
|---|---|---|
| Dec 31, 2023 | 38.88% | 16.46% |
| Dec 31, 2022 | 57.75% | 27.31% |
| Dec 31, 2021 | 41.43% | 13.24% |
| Dec 31, 2020 | 36.28% | -9.63% |
| Dec 31, 2019 | 62.23% | 6.59% |
| Dec 31, 2018 | 85.71% | 11.08% |
| Dec 31, 2017 | 96.42% | 7.66% |
| Dec 31, 2016 | 78.20% | 1.07% |
| Dec 31, 2015 | 109.52% | 4.49% |
| Dec 31, 2014 | 130.11% | 15.37% |
| Dec 31, 2013 | 151.81% | 16.83% |
| Dec 31, 2012 | 125.98% | 22.69% |
| Dec 31, 2011 | 100.23% | 23.57% |
| Dec 31, 2010 | 61.79% | 18.98% |
| Dec 31, 2009 | 35.09% | 13.07% |
| Dec 31, 2008 | 46.50% | 20.47% |
| Dec 31, 2007 | 33.15% | 24.73% |
| Dec 31, 2006 | 47.34% | 27.20% |
| Dec 31, 2005 | 34.59% | 28.14% |
Based on: 10-K (reporting date: 2023-12-31), 10-K (reporting date: 2022-12-31), 10-K (reporting date: 2021-12-31), 10-K (reporting date: 2020-12-31), 10-K (reporting date: 2019-12-31), 10-K (reporting date: 2018-12-31), 10-K (reporting date: 2017-12-31), 10-K (reporting date: 2016-12-31), 10-K (reporting date: 2015-12-31), 10-K (reporting date: 2014-12-31), 10-K (reporting date: 2013-12-31), 10-K (reporting date: 2012-12-31), 10-K (reporting date: 2011-12-31), 10-K (reporting date: 2010-12-31), 10-K (reporting date: 2009-12-31), 10-K (reporting date: 2008-12-31), 10-K (reporting date: 2007-12-31), 10-K (reporting date: 2006-12-31), 10-K (reporting date: 2005-12-31).
Comparison to Industry (Energy)
Texas Pacific Land Corp., ROE, long-term trends, comparison to industry (energy)
| Texas Pacific Land Corp. | Energy | |
|---|---|---|
| Dec 31, 2023 | 38.88% | 16.67% |
| Dec 31, 2022 | 57.75% | 26.98% |
| Dec 31, 2021 | 41.43% | 13.21% |
| Dec 31, 2020 | 36.28% | -12.46% |
| Dec 31, 2019 | 62.23% | 3.63% |
| Dec 31, 2018 | 85.71% | 10.63% |
| Dec 31, 2017 | 96.42% | 6.58% |
| Dec 31, 2016 | 78.20% | 0.52% |
| Dec 31, 2015 | 109.52% | 4.61% |
| Dec 31, 2014 | 130.11% | 15.28% |
| Dec 31, 2013 | 151.81% | 16.85% |
| Dec 31, 2012 | 125.98% | 22.06% |
| Dec 31, 2011 | 100.23% | 22.94% |
| Dec 31, 2010 | 61.79% | 18.51% |
| Dec 31, 2009 | 35.09% | 13.29% |
| Dec 31, 2008 | 46.50% | 21.20% |
| Dec 31, 2007 | 33.15% | 25.23% |
| Dec 31, 2006 | 47.34% | 27.51% |
| Dec 31, 2005 | 34.59% | 28.17% |
Based on: 10-K (reporting date: 2023-12-31), 10-K (reporting date: 2022-12-31), 10-K (reporting date: 2021-12-31), 10-K (reporting date: 2020-12-31), 10-K (reporting date: 2019-12-31), 10-K (reporting date: 2018-12-31), 10-K (reporting date: 2017-12-31), 10-K (reporting date: 2016-12-31), 10-K (reporting date: 2015-12-31), 10-K (reporting date: 2014-12-31), 10-K (reporting date: 2013-12-31), 10-K (reporting date: 2012-12-31), 10-K (reporting date: 2011-12-31), 10-K (reporting date: 2010-12-31), 10-K (reporting date: 2009-12-31), 10-K (reporting date: 2008-12-31), 10-K (reporting date: 2007-12-31), 10-K (reporting date: 2006-12-31), 10-K (reporting date: 2005-12-31).