In 1888, the Texas and Pacific Railway went bankrupt. Stockholders lost everything but bondholders ended up owning the railroad’s land holdings, now called the Texas Pacific Land Trust (TPL).
Based in Dallas, the trust, still traded on the New York Stock Exchange, owns about 900,000 acres of land in West Texas and rents it out for cattle grazing and oil exploration. It also actively buys and sells parcels of land.
For the past five years, this land trust has shown 48% average annual earnings growth; last year was even faster. Encouragingly, TPL has shown a profit each year in the past 15 years. Another strong point: It has enough cash to cover all of its debt.
The stock sells for 17 times earnings.