Like almost everything else, the grocery business is bigger in Texas. Many grocers have stepped up their Texas game, following booming population growth in search of profits. But few have achieved the near-cult-like status of H-E-B Grocery, a San Antonio–based institution founded in 1905.
The family-owned grocer has more than 440 locations in Texas and Mexico and has become a state icon over the last century. Here's what you need to know about investing in H-E-B.
Is H-E-B publicly traded?
The San Antonio-based grocer is not publicly traded, and it's unlikely to launch an initial public offering (IPO) soon, if ever. It's been owned by the Butt family since its founding. "H-E-B" stands for Howard E. Butt, who delivered groceries from a wagon as a boy and took over the original store in Kerrville, Texas, from his mother, Florence Thornton Butt, in 1919.
Publicly Traded Company
IPO
Is the company profitable?
As a privately held company, H-E-B doesn't have to provide detailed financial information. However, it continues to expand, and it does report annual sales figures. It's come a long way since Florence Butt founded Mrs. C. C. Butt's Staple and Fancy Grocery with a $60 loan:
- 2012: $18.7 billion
- 2013: $20 billion
- 2014: $20 billion
- 2015: $22 billion
- 2016: $23 billion
- 2017: $23 billion
- 2018: $25 billion
- 2019: $28 billion
- 2020: $31.2 billion
- 2021: $32.8 billion
- 2022: $38.9 billion
- 2023: $43.6 billion
- 2024: $46.5 billion
H-E-B alternatives
Since it's privately held, you can't invest directly in H-E-B. However, a number of publicly traded grocery stores do offer shares to investors and are affected by many of the same trends that affect H-E-B's financial outlook. Some of the more well-known alternatives for investment include:
- Walmart: More than 5,200 stores in all 50 states
- Albertsons: More than 2,200 locations in 35 states
- Kroger: More than 1,200 grocery stores across 16 states
Before investing in any of the alternatives to H-E-B, investors should consider factors that influence the grocery industry's financial performance. High inflation, for example, may benefit suppliers more than it helps individual grocers. Likewise, rising transportation costs, climate-related disasters, interest rates, and the general state of the economy can affect grocery chains' bottom lines.
How to buy stocks similar to H-E-B
Investors who want to buy one of these H-E-B alternatives can purchase shares in any brokerage account. Here's a step-by-step guide on how to invest in stocks like H-E-B.
- Open your brokerage account: Log in to your brokerage account where you handle your investments.
- Search for the stock: Enter the ticker or company name into the search bar to bring up the stock's trading page.
- Decide how many shares to buy: Consider your investment goals and how much of your portfolio you want to allocate to this stock.
- Select order type: Choose between a market order to buy at the current price or a limit order to specify the maximum price you're willing to pay.
- Submit your order: Confirm the details and submit your buy order.
- Review your purchase: Check your portfolio to ensure your order was filled as expected and adjust your investment strategy accordingly.
The bottom line
The odds of H-E-B going public aren't great in the current IPO environment. But the company's accolades, deep following in Texas and Northeastern Mexico, and strong and steady expansion make it an extremely appealing opportunity that bears watching.
H-E-B may never go public, but there remain ways to invest in similar companies by purchasing shares of a competitor or an ETF that follows consumer staples stocks.
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