Texas Pacific LandCoterra Energy

Texas Pacific Land vs Coterra Energy

Texas Pacific Land and Coterra Energy are compared to reveal their business models, financial performance, and market context. This page presents neutral, accessible information about how each company...

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Stagflation Standouts

Stagflation Standouts

This collection features stocks and assets carefully selected by professional analysts to potentially outperform during stagflation periods. These defensive investments have already shown strength while the broader market struggles, making them worth consideration for economic uncertainty ahead.

Published: May 19, 2025

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Investment Analysis

Pros

  • Texas Pacific Land is one of the largest landowners in Texas, providing a strong and unique asset base in the Permian Basin.
  • Revenue and earnings showed healthy growth in 2024, with revenues increasing nearly 12% year-over-year to $705.82 million.
  • The company has a very high operating margin of over 76% and net margin above 63%, indicating strong profitability.

Considerations

  • The stock trades at a very high price-to-earnings ratio (~47x forward P/E), significantly above its peers and the broader oil and gas industry.
  • The price-to-book ratio is elevated at about 25.8 times, implying a substantial premium to peer valuations.
  • TPL’s business is highly concentrated in land and resource management, which may have limited diversification compared to integrated energy companies.

Pros

  • Coterra Energy has a market capitalization near $18 billion, reflecting its position as a sizable independent energy company.
  • The company has demonstrated solid estimated earnings growth of around 11% helping support a reasonable forward P/E ratio of approximately 11.5x.
  • Coterra benefits from diversified operations across exploration, production, and midstream segments, providing multiple growth drivers.

Considerations

  • The company remains exposed to commodity price volatility, which can significantly affect cash flows and profitability.
  • Coterra operates in a highly cyclical oil and gas sector subject to regulatory and environmental risks worldwide.
  • Capital expenditure requirements and potential execution risks associated with resource development may pressure future free cash flow.

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