Texas Now Home To More Fortune 500 Companies Than Any Other State
2022.05.26 18:02
Texas now leads the nation in the number of Fortune 500 companies that are headquartered in the state, it was revealed this week. As many as 53 highly profitable businesses — from Exxon Mobil (NYSE:XOM) to AT&T (NYSE:T), to the recently relocated Tesla (NASDAQ:TSLA) and HP Inc (NYSE:HPQ) — choose to hang their hat in the Lone Star State, beating New York and California.
This is no accident. As I like to say, money flows where it’s respected most. If that’s true, then we should continue to see Texas, which has among the most business-friendly policies in the U.S., take additional market share of corporate headquarters away from other states.
That’s precisely what it’s been doing in recent years, of course. In 2021, some 62 companies relocated their headquarters to Texas from 17 states and three countries, according to the just-released Relo Tracker Report. California was the origin state to 25 of those companies, more than any other state, with Tesla being the biggest and most noteworthy.
A year before Tesla, it was Hewlett Packard Enterprise (NYSE:HPE). The company nearly single-handedly established California’s Silicon Valley as a premiere global tech hub more than 80 years ago. HPE now resides in Spring, Texas, just north of Houston.
Software maker Oracle (NYSE:ORCL), co-founded in 1977 by now-multibillionaire Larry Ellison, also recently relocated from its former home on the San Francisco Bay to Austin.
So many people and businesses are relocating to Texas, in fact, that Verizon (NYSE:VZ) recently announced it was increasing capital spending in the state by an additional $97.9 million. Between January 2020 and April 2022, more than 200,000 Verizon customers moved to Texas, putting a strain on demand. Austin alone has seen a data traffic spike of 323% since the start of the pandemic.
Why Are So Many Businesses Moving to Texas?
Six years ago, I wrote an article titled “11 Reasons Why Everyone Wants to Move to Texas.” Although I would change some of those reasons today if I could go back and rewrite it, many of them still help explain why Texas remains a top destination for businesses as well as individuals and families seeking a way to get ahead in life.
Compared with other states, Texas has a low cost of living, which is even more appealing now with inflation running at an 8% annual rate. Corporate rents are relatively low. Electricity costs are half what they are in New York and California. Average gas prices are significantly cheaper.
At the same time, Texas offers a highly educated workforce. The state boasts several world-class Tier One universities, like the University of Texas at Austin, Texas A&M, Rice, Texas Tech, Baylor and more.
The tax and regulatory environment in Texas is incredibly attractive. The state famously doesn’t levy an income tax on individuals or businesses. The drawback here is that Texas has among the highest property taxes in the nation, but when you consider that it has far fewer business regulations than most states, the savings balance out.
Finally, companies in Texas have access to some of the best infrastructure the nation has to offer, including roads, highways and seaports. The Port of Houston may not be the largest or busiest port in the U.S.—that title belongs to the Port of Los Angeles—but it tops all others in terms of tonnage. The port announced this month that it posted its busiest April on record, having moved a total of 334,493 20-foot equivalent units (TEUs).
U.S. Global Investors Proud To Operate In Texas
Besides Tesla, Hewlett Packard Enterprise and Oracle, other big-name brands have recently made the move to the Lone Star State. Those include Charles Schwab (NYSE:SCHW), Pabst Brewing, real estate giant CBRE and plastics manufacturer Nissei America. A reimagined DeLorean company—maker of what became the iconic time machine in the film series—is also putting down stakes in U.S. Global Investors’ hometown of San Antonio.
I’m thrilled by the news that Texas now has more Fortune 500 company headquarters than any other state, but it doesn’t surprise me in the least. I wouldn’t want to be anywhere else.
