Capital Return Policy

tpltblogger6 Comments

Why was the decision made to return almost 50% of capital in the form of dividends last year? This is a big break from policy in prior years. Individual marginal tax rates were lowered a couple/few percent but could that have been the driver of such a large shift? Was further increasing the concentration (or the desire not to) of major holders a factor? Who’s call is that? What are their motivations? Was this fight anticipated? I’ve got so many questions.

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6 thoughts on “Capital Return Policy”

  1. Beats 2019’s policy, which seems to be premised on slowing buybacks to a near halt and divert those resources over to google and Facebook ads for the general.

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  2. Good catch. This does raise questions. Hell ever since this trustee election came up all I have are more questions than answers. I used to be naive and just ‘trust’ that my captial was handled responsibly. Now? I have more doubt. i am still confident its a unique one of a kind asset. I just want to know more and be able to count on those running the show. Its a shame that it takes a fight to bring light to operations.

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  3. This is a great question (and reason I love this blog!). Wouldn’t we like to know what strategy dictates the annual mix of buybacks vs dividends? Management would probably contend buybacks are less impactful when share price is high (but then why not pivot when share price sunk 50% in 4th quarter?), but with all the animosity with HK and Oliver we now see has existed going back to 2016, it would not surprise me one bit if the real reason for reducing buybacks was to keep HK from increasing its percentage of ownership. Every decision made by management must now be brought into question.

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  4. It seems like TPL has enacted the prisoners dilemma policy towards Horizon Kinetics. We are going to force you to sell our shares. They might think they have the upper hand but what happens if horizon makes a deal with Say chevron or blackstone and keeps taking up their share count. If you look at the SEC filings they get up everday and buy shares. TPL management …. crickets.

    Too much money printed. This is the ultimate hard asset. Me thinks the TPL people have went all in and don’t have the cards. Horizon only needs one big friend

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  6. The last time I looked, management has been setting aside 2% a year for buybacks. The rest of the disbursements has been going to building the dividend. I don’t why that policy was set any more than anyone else, though I have heard rumblings in the past about the miniscule dividend.

    Since my shares are in a Roth, I really don’t mind the dividend increasing. Nor do I mind that shares are consistently bought back at a steady pace.

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