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Energy dominates Oklahoma Inc. list, but manufacturer takes top spot

More than two-thirds of the state's publicly traded companies are in the energy sector, but this year's top spot in the Oklahoma Inc. rankings went to a firm that survived by reducing its exposure to the energy industry.
BY DON MECOY Published: November 13, 2011

More than two-thirds of the Oklahoma-based public companies ranked in Oklahoma Inc. — and 11 of the top 12 performers — are in the energy sector.

Which makes this year's top performer an outlier. Overall No. 1 LSB Industries is an Oklahoma City-based manufacturer of chemicals and climate control devices such as heat pumps.

Manufacturer tops ratings

LSB Industries, ironically, survived the oil bust of the 1980 by reducing its dependence on energy-related firms.

In the July 2010 through June 2011 period tracked by Oklahoma Inc., LSB Industries earned the highest rankings in two of the three categories that produce the overall rankings.

The next 11 companies in the rankings all are in energy, although those companies operate with various business models.

The energy sector as a share of the state's gross domestic product and personal income is nearly as large now as it was in 1981, Federal Reserve economist Chad Wilkerson said. The oil bust of the early 1980s threw Oklahoma into a recession that lasted for years, which Wilkerson said raises the question of whether that sector should be so dominant.

“It's been an outstanding thing certainly for the last year, probably for the past five years,” Wilkerson said. “States concentrated in energy have generally grown faster than other states in the long run.”

Energy activity has been the main catalyst for Oklahoma's recent economic growth, and helped delay the state's entry into the last recession, he said.

“Of course, it comes with the huge risk of something happening like what happened here in the 1980s,” he said.

But most analysts and futures markets indicate that crude oil and natural gas prices should remain steady for the foreseeable future, Wilkerson said.

Investors in those top-ranking energy companies during the past year have been rewarded, although not nearly at the rate of those with a stake in LSB Industries, which produced a 223 percent return.

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