Price to FCFE (P/FCFE)
Free Cash Flow to Equity (FCFE)
Texas Pacific Land Corp., FCFE calculation
US$ in thousands
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).
The financial performance from 2019 to 2023 demonstrates a period of volatility characterized by a significant contraction in 2020, followed by a strong recovery peaking in 2022 and a slight moderation in 2023. Both cash provided by operating activities and free cash flow to equity (FCFE) exhibit a highly synchronized trajectory, indicating a consistent relationship between operational liquidity and the cash available to shareholders.
- Operating Cash Flow Analysis
- Cash provided by operating activities experienced a notable decline of approximately 39.6% between 2019 and 2020, falling from $342.8 million to $207.0 million. This contraction was followed by a period of aggressive growth, with figures rising to $265.2 million in 2021 and peaking at $447.1 million in 2022. A slight decrease was observed in 2023, with operating cash flow settling at $418.3 million.
- Free Cash Flow to Equity (FCFE) Analysis
- FCFE mirrored the operational trend, decreasing from $310.7 million in 2019 to $202.0 million in 2020. A substantial recovery followed, with FCFE increasing to $250.7 million in 2021 and reaching a five-year high of $428.0 million in 2022. Similar to the operating cash flow, FCFE saw a modest decline in 2023, closing the period at $403.3 million.
- Cash Flow Conversion and Efficiency
- A narrow gap is maintained between operating cash flows and FCFE throughout the analyzed period. This close alignment suggests that net capital expenditures and net borrowing activities have remained relatively low in proportion to total cash generation. Consequently, a significant majority of the cash generated from operations has been successfully converted into free cash flow available to equity holders.
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Price to FCFE Ratio, Current
Texas Pacific Land Corp., current P/FCFE calculation, comparison to benchmarks
| No. shares of common stock outstanding | 22,974,914 |
| Selected Financial Data (US$) | |
| Free cash flow to equity (FCFE) (in thousands) | 403,265) |
| FCFE per share | 17.55 |
| Current share price (P) | 1,329.62 |
| Valuation Ratio | |
| P/FCFE | 75.75 |
| Benchmarks | |
| P/FCFE, Competitors1 | |
| Chevron Corp. | 19.53 |
| ConocoPhillips | 27.01 |
| Exxon Mobil Corp. | 30.76 |
| P/FCFE, Sector | |
| Oil, Gas & Consumable Fuels | 22.27 |
| P/FCFE, Industry | |
| Energy | 22.19 |
Based on: 10-K (reporting date: 2023-12-31).
1 Click competitor name to see calculations.
If the company P/FCFE is lower then the P/FCFE of benchmark then company is relatively undervalued.
Otherwise, if the company P/FCFE is higher then the P/FCFE of benchmark then company is relatively overvalued.
Price to FCFE Ratio, Historical
Texas Pacific Land Corp., historical P/FCFE calculation, comparison to benchmarks
| Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | Dec 31, 2019 | ||
|---|---|---|---|---|---|---|
| No. shares of common stock outstanding1 | 23,005,266 | 23,086,488 | 23,236,125 | 23,268,468 | 23,268,468 | |
| Selected Financial Data (US$) | ||||||
| Free cash flow to equity (FCFE) (in thousands)2 | 403,265) | 428,043) | 250,701) | 201,951) | 310,698) | |
| FCFE per share3 | 17.53 | 18.54 | 10.79 | 8.68 | 13.35 | |
| Share price1, 4 | 507.46 | 596.28 | 337.37 | 370.62 | 226.07 | |
| Valuation Ratio | ||||||
| P/FCFE5 | 28.95 | 32.16 | 31.27 | 42.70 | 16.93 | |
| Benchmarks | ||||||
| P/FCFE, Competitors6 | ||||||
| Chevron Corp. | 18.24 | 10.59 | 32.05 | — | — | |
| ConocoPhillips | 11.74 | 8.93 | 10.61 | — | — | |
| Exxon Mobil Corp. | 12.46 | 8.73 | 19.82 | — | — | |
| P/FCFE, Sector | ||||||
| Oil, Gas & Consumable Fuels | 13.84 | 9.33 | 19.75 | — | — | |
| P/FCFE, Industry | ||||||
| Energy | 14.25 | 10.19 | 20.81 | — | — | |
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).
1 Data adjusted for splits and stock dividends.
3 2023 Calculation
FCFE per share = FCFE ÷ No. shares of common stock outstanding
= 403,265,000 ÷ 23,005,266 = 17.53
4 Closing price as at the filing date of Texas Pacific Land Corp. Annual Report.
5 2023 Calculation
P/FCFE = Share price ÷ FCFE per share
= 507.46 ÷ 17.53 = 28.95
6 Click competitor name to see calculations.
The valuation of Texas Pacific Land Corp. between 2019 and 2023 is characterized by a significant expansion in the Price to Free Cash Flow to Equity (P/FCFE) multiple, followed by a period of relative stabilization at a higher valuation plateau.
- Share Price Trajectory
- A strong upward trend in share price is evident over the five-year period. The price increased from 226.07 USD in 2019 to a peak of 596.28 USD in 2022, representing a substantial appreciation in market value. A moderate correction occurred in 2023, with the price settling at 507.46 USD.
- Free Cash Flow to Equity (FCFE) Performance
- FCFE per share exhibited volatility, starting at 13.35 USD in 2019 and experiencing a decline to 8.68 USD in 2020. A recovery phase followed, with cash flow increasing steadily to a peak of 18.54 USD in 2022, before a slight decrease to 17.53 USD in 2023.
- P/FCFE Ratio Analysis
- The P/FCFE ratio underwent a sharp escalation in 2020, rising from 16.93 to 42.70. This spike was driven by the simultaneous increase in share price and a contraction in FCFE per share. From 2021 through 2023, the ratio normalized and stabilized, fluctuating within a narrower range between 28.95 and 32.16.
The divergence between price and cash flow in 2020 suggests a period of significant valuation expansion. However, the convergence seen in 2022 indicates that the subsequent price increases were better supported by fundamental growth in free cash flow. The overall trend reflects a transition from a lower valuation multiple in 2019 to a sustained premium valuation in the following years.
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