ROIC % measures how well a company generates cash flow relative to the capital it has invested in its business. It is also called ROC %. Texas Pacific Land's annualized return on invested capital (ROIC %) for the quarter that ended in Mar. 2026 was 39.86%.
As of today (2026-07-05), Texas Pacific Land's WACC % is 3.66%. Texas Pacific Land's ROIC % is 45.21% (calculated using TTM income statement data).
Texas Pacific Land generates higher returns on investment than it costs the company to raise the capital needed for that investment. It is earning excess returns. A firm that expects to continue generating positive excess returns on new investments in the future will see its value increase as growth increases.
Texas Pacific Land (NYSE:TPL) ROIC % Explanation
ROIC % measures how well a company generates cash flow relative to the capital it has invested in its business. It is also called ROC %. The reason book values of debt and equity are used is because the book values are the capital the company received when issuing the debt or receiving the equity investments.
There are four key components to this definition. The first is the use of operating income or EBIT rather than net income in the numerator. The second is the tax adjustment to this operating income or EBIT, computed as a hypothetical tax based on an effective or marginal tax rate. The third is the use of book values for invested capital, rather than market values. The final is the timing difference; the capital invested is from the end of the prior year whereas the operating income or EBIT is the current year's number.
Why is ROIC % important?
Because it costs money to raise capital. A firm that generates higher returns on investment than it costs the company to raise the capital needed for that investment is earning excess returns. A firm that expects to continue generating positive excess returns on new investments in the future will see its value increase as growth increases, whereas a firm that earns returns that do not match up to its cost of capital will destroy value as it grows.
As of today, Texas Pacific Land's WACC % is 3.66%. Texas Pacific Land's ROIC % is 45.21% (calculated using TTM income statement data).
Texas Pacific Land generates higher returns on investment than it costs the company to raise the capital needed for that investment. It is earning excess returns. A firm that expects to continue generating positive excess returns on new investments in the future will see its value increase as growth increases.
Be Aware
Like ROE % and ROA %, ROIC % is calculated with only 12 months of data. Fluctuations in the company's earnings or business cycles can affect the ratio drastically. It is important to look at the ratio from a long term perspective.
Texas Pacific Land ROIC % Related Terms
Texas Pacific Land ROIC % Historical Data
* Premium members only.
The historical data trend for Texas Pacific Land's ROIC % can be seen below:
* For Operating Data section: All numbers are indicated by the unit behind each term and all currency related amount are in USD. * For other sections: All numbers are in millions except for per share data, ratio, and percentage. All currency related amount are indicated in the company's associated stock exchange currency.
For the Oil & Gas E&P subindustry, Texas Pacific Land's ROIC %, along with its competitors' market caps and ROIC % data, can be viewed below:
* Competitive companies are chosen from companies within the same industry, with headquarter located in same country, with closest market capitalization; x-axis shows the market cap, and y-axis shows the term value; the bigger the dot, the larger the market cap. Note that "N/A" values will not show up in the chart.
Texas Pacific Land ROIC % vs Oil & Gas Industry
For the Oil & Gas industry and Energy sector, Texas Pacific Land's ROIC % distribution charts can be found below:
* The bar in red indicates where Texas Pacific Land's ROIC % falls into.
Note:
The Operating Income data used here is four times the quarterly (Mar. 2026) data.
The tax rate is limited to between 0% and 100%.
* For Operating Data section: All numbers are indicated by the unit behind each term and all currency related amount are in USD. * For other sections: All numbers are in millions except for per share data, ratio, and percentage. All currency related amount are indicated in the company's associated stock exchange currency.
Texas Pacific Land (TPL) has a ROIC % of 39.86% as of Mar. 2026. Return on invested capital is the ratio of current-period net income to average two-period invested capital. View historical data on Texas Pacific Land and its competitors.
Is Texas Pacific Land's ROIC % too high?
Texas Pacific Land's current ROIC % is 39.86%. The Oil & Gas industry median ROIC % is 3.70. Texas Pacific Land's value of 39.86% is 977.3% above this industry median. Overall, Texas Pacific Land has a GF Score™ of 90/100 and is considered Fairly Valued, reflecting its overall financial health beyond just this single metric.
How does Texas Pacific Land's ROIC % compare to EQT and EXE?
Texas Pacific Land's ROIC % of 39.86% can be compared against companies in the Oil & Gas industry. The industry median ROIC % is 3.70. Texas Pacific Land's value of 39.86% is 977.3% above this benchmark. See the competitive comparison table and distribution chart on this page for a detailed peer-by-peer breakdown.
What is a good ROIC % for an Oil & Gas company?
The median ROIC % among Oil & Gas companies is 3.70, based on 999 companies in the industry. Companies in the top quartile (top 25%) have a ROIC % significantly above this median, while those in the bottom quartile fall well below. However, ROIC % should not be evaluated in isolation — investors should consider it alongside profitability, growth, and financial strength metrics. Texas Pacific Land's current ROIC % of 39.86% is 977.3% above the industry median. Use the industry distribution chart on this page to see where any company falls relative to its peers.
What does a high ROIC % mean?
A high ROIC % can signal that a stock is expensive relative to its fundamentals. Return on invested capital is the ratio of current-period net income to average two-period invested capital. View historical data on Texas Pacific Land and its competitors. For the Oil & Gas industry, the median ROIC % is 3.70 — values significantly above this may indicate overvaluation, while values below may suggest a bargain or underlying issues. Texas Pacific Land's current ROIC % is 39.86%. However, context matters — high-growth companies often justify higher valuations. Always evaluate alongside other metrics like GF Score™ and GF Value™.
Is Texas Pacific Land stock overvalued right now?
Based on GuruFocus' analysis, Texas Pacific Land (TPL) is currently considered Fairly Valued. The stock's GF Value™ is $369.98, compared to a current price of $407.20 — trading 10.1% above its estimated fair value. The current ROIC % is 39.86% and 977.3% above the Oil & Gas industry median of 3.70. Texas Pacific Land's overall GF Score™ is 90/100 with 2 warning signs to review. Investors should evaluate multiple metrics — including profitability, growth, and financial strength — before making a decision.
How is ROIC % calculated?
ROIC % is calculated from a company's financial statements. For Texas Pacific Land (TPL), the current ROIC % is 39.86% as of Mar. 2026. GuruFocus calculates this using data sourced from SEC filings and annual reports. See the calculation section and 30-year financial data on this page for the full breakdown.
Is Texas Pacific Land (TPL) Overvalued in 2026?
Based on GuruFocus' analysis, Texas Pacific Land stock appears to be overvalued.
The current stock price of $407.20 is trading 10.1% above its estimated GF Value™ of $369.98.
GuruFocus considers Texas Pacific Land to be Fairly Valued.
Key valuation signals for TPL:
ROIC %: 39.86%
GF Value™: $369.98 vs. price of $407.20 (10.1% above fair value)
Industry Position: 977.3% above the Oil & Gas median
No single metric tells the full story. See the TPL stock analysis page for a complete view including 30-year financials, guru trades, and insider activity.
Texas Pacific Land Corp is mainly engaged in the sales and leases of land owned, retaining oil and gas royalties, and the overall management of the land owned. The group operates its business in two reportable segments: Land and Resource Management and Water Service and Operations. The Land and Resource Management segment, which generates maximum revenue, focuses on managing its several surface acres of land and its oil and gas royalty interests, principally concentrated in the Permian Basin. The revenue streams of this segment consist of royalties from oil and gas, revenues from easements and commercial leases, and land and material sales. The Water Services and Operations segment encompasses the business of providing a full-service water offering to operators in the Permian Basin.
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