Sonic Corp. leads service companies

The Oklahoma City-based drive-in chain jumped nine spots to No. 16 on this year's Oklahoma Inc. rankings.
BY JENNIFER PALMER jpalmer@opubco.com Modified: October 30, 2012 at 4:24 pm •  Published: November 11, 2012
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Bricktown-based Sonic Corp. was the only service company to gain significant standing on the Oklahoma Inc. top companies chart this year.

Jumping nine spots from No. 25 to No. 16, the drive-in restaurant franchise fared better than any of the other four service sector companies. Dollar Thrifty Automotive Group, based in Tulsa, inched down one spot, from No. 13 to No. 14. Educational Development Corp. dropped three notches to No. 30 from No. 27 and Graymark Healthcare Inc. ticked up two spots to No. 31.

Investors are missing the boat if they fail to notice Sonic, said Jake Dollarhide, chief executive of Longbow Asset Management in Tulsa, who follows the services sector. Versus some of the better-known competing brands like McDonald's or Chipotle Mexican Grill, Sonic hasn't been regarded as a go-to investment. But its menu goes “toe-to-toe” with any of them, he added.

“I look for Sonic to go higher in the next couple of years,” Dollarhide said. “A family of four might pause if the economy flattens about going to a sit-down restaurant. But they don't really pause as much to stop by Sonic and grab a drink or ice cream or burger.”

While Sonic's total return was down 5.7 percent and revenues dropped 1.1 percent in the year ending June 30, company earnings per share surged 195 percent, according to the Capital IQ rankings. It was the fourth highest increase of any company on this year's Oklahoma Inc. list. The company's market value was $586.7 million as of June 29.

The bidding war to acquire Dollar Thrifty helped its stock come back from the brink. Earnings per share were up 57.6 percent in the year ending June 30 and the one-year total return rose nearly 10 percent. The company hit a low in early 2009 when shares bottomed out at 60 cents.

“They have done an amazing job of a comeback from the brink of insolvency,” Dollarhide said.



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