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. Unfortunately for investors, however, the grocer isn't publicly traded. The only way to get a direct share of H-E-B ownership is to work there.
Publicly traded?
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.
IPO
However, that's not to say that a sale or IPO is impossible. Pace Foods, the maker of Pace Picante, was a family-owned business in Paris, Texas, that sold to Camden, New Jersey–based Campbell Soup (CPB 1.65%) in 1994.
Lone Star beer was bought in 1999 by the Milwaukee-founded Pabst Brewing Co. but returned to its San Antonio headquarters in 2020. Even the iconic Whataburger, a source of comfort food for Texans since the 1950s, was sold in 2019 to a Chicago-based private equity firm.
Even though it's not outside the realm of possibility, it remains highly unlikely that the Butt family will decide to go public with the fifth-largest private company in the United States.
When will it IPO?
When will H-E-B IPO?
As mentioned, the Texas grocer has announced no plans for an IPO. However, an H-E-B IPO would likely attract widespread interest, both inside and outside of Texas.
Publicly Traded Company
Overview
H-E-B overview
The company has prospered in some of the fastest-growing markets. That's even despite strong competition from heavyweights such as Kroger (KR 0.45%), Albertsons (ACI 0.29%), Walmart (WMT -0.07%), Costco (COST -0.03%), and Amazon's (AMZN -1.86%) Whole Foods.
The grocer announced a plan in 2015 to give stock to 55,000 U.S. employees. It handed over 15% of its ownership to employees older than 21 who had worked at least a year and recorded 1,000 hours of work. Employees received nonvoting shares amounting to 3% of their salary (vested after three years) and $100 in stock for each continuous year of service.
The company has invested heavily in the community, donating an estimated 5% of its pre-tax earnings to civic and charitable organizations for over 80 years. Its H-E-B Tournament of Champions celebrated its 40th year in 2025, bringing its total to $194 million donated.
H-E-B has also solidified community support by spending heavily on emergency preparedness, from rolling out disaster relief trailers after Hurricane Harvey in 2017 to its speedy and thoughtful response to the COVID-19 pandemic.
The company has grown to include 154,000 employees and recorded $46.5 billion in revenue in 2024, according to Forbes.
Profitability
Is H-E-B 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
Should I invest?
Should I invest in H-E-B?
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
How to buy H-E-B stock
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.
ETF options
ETFs with exposure to H-E-B
Exchange-traded funds (ETFs) do not offer exposure to H-E-B because it's not publicly traded, but that shouldn't prevent investors from gaining exposure to the grocery industry. A number of ETFs bundle food retailers and consumer staple stocks into shares that can be bought and sold easily.
Exchange-Traded Fund (ETF)
Here are some possible options:
- The Invesco Dynamic Food & Beverage ETF (PBJ 0.18%) has $94.4 million in net assets and a 0.62% expense ratio, meaning you'd be charged $6.20 for every $1,000 invested. The ETF focuses on food manufacturers, such as Kroger at 4.8%, Kraft Heinz (KHC 0.62%) at 4.9%, and Hershey (HSY 0.26%) at 5.4%.
- Another option is the Consumer Staples Select Sector SPDR Fund (XLP 0.21%). This ETF has $15.5 billion under management and an expense ratio of 0.08%. Its top holdings include Costco at 9.8%, Walmart at 10.6%, and Procter & Gamble (PG -0.31%) at 8.4%.
- The Vanguard Consumer Staples Fund (VDC 0.02%) has assets of $8.8 billion and a low expense ratio of 0.09%. Its top holdings include Procter & Gamble (11%), Costco (12.7%), and Walmart (12.9%).
Related investing topics
The bottom line on H-E-B
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.
FAQs
Investing in H-E-B Grocery FAQs
Can you buy stock in H-E-B?
No. H-E-B is a privately held, family-owned business.
What is the H-E-B stock plan?
H-E-B makes ownership shares available to its employees. They can receive nonvoting shares amounting to 3% of their salaries (vested after three years) and $100 in stock for each continuous year of service.
Does H-E-B give employees stock?
The grocer makes ownership shares available to employees who are older than 21, have worked at least a year, and have recorded 1,000 hours of work.
Are grocery stores good investments?
Although margins are frequently quite thin, the consumer staples sector can be a very good investment because people need to eat in good and bad economic times. Groceries have recently benefited from inflation -- it's driven restaurant prices much higher -- because it can be cheaper to prepare food at home.
