Investing in Your Backyard: Oklahoma!

Hey, this is David.
I've got a hat the size of Oklahoma!
Put on my boots and going down to Walters,
Get me some barbecue,
Bring some home to the misses --
He'll give you a bag to put it in!
This is David, signing off.
    -- R.E.M., "Walter's Theme"

Break out the beer and burgers -- it's a backyard investing barbecue! You can't order in from Walter's, though, as the shipping charges from Georgia would be murderous even if the joint was still in business. National Poetry Month makes me do silly things sometimes.

There are many good reasons for researching investment opportunities in a certain geographic area. Today it's Oklahoma, the Sooner state, once filled to the borders with cowboys. Today, oil and gas crews have pushed a few of the cattle herders aside, but food production remains a mainstay of the local economy.

If you happen to live in Tulsa or Oklahoma City, you already have a few advantages when it comes to evaluating the local market, such as access to local news sources, word on the street, and a high probability of being a customer or employee of these companies. And if you're not a local resident, you might still want to know whether the weather matches the business climate -- a hot area could be chock-full of undiscovered treasures on their way to greatness.

Without further ado, here are the largest companies headquartered between Kenton and Broken Bow:

Company	Market Cap (billions)	CAPS Rating	Bull Ratio
Devon Energy (NYSE: DVN)	$32.5	*****	96%
Williams Companies (NYSE: WMB)	$17.8	****	97%
Chesapeake Energy (NYSE: CHK)	$15.4	*****	97%
Oneok Partners (NYSE: OKS)	$5.9	****	97%
ONEOK (NYSE: OKE)	$5.3	*****	96%

Data gathered from Motley Fool CAPS current as of 4/27/2007.

Before we look at the individual companies, I have to say that I'm impressed by the CAPS ratings in the Western fields and hills. Thirty companies here have earned a star rating, and 22 of them carry four or more stars. The sector effect is in full swing here, of course -- many of these highly rated businesses are drillers, refiners, or other gas and oil processing experts. Still, color me impressed.

All five of the top market caps belong to such energy-related corporations. Devon Energy, for example, covers many steps of the process, from exploration and drilling to processing and transportation of both oil and natural gas. CAPS player kealaw explains the five-star attraction: "Has a large interest in recent oil and gas discovery in the Gulf. Until we can develope hydrogen, oil will just keep going up."

Chesapeake is another five-star business, and this one caught Motley Fool Inside Value chief analyst Philip Durell's eye a few months ago. The domestic concentration of Chesapeake's gas reserves appealed to his risk aversion. "Our energy needs aren't going away, and Chesapeake offers an attractive opportunity to take a stake in this sector," he said in his official recommendation.

What else?
So we've established the strong phalanx of energy-related stocks in the area. A shower of stars and four newsletter picks among them, this section speaks for itself. So what else can we find afield of Tulsa, or in the Tishumingu mountains?

There are several national brand names around. Take drive-in burger chain Sonic (Nasdaq: SONC), a four-star CAPS stock with enthusiastic customers like barbil. "They have captured nostalgia with their drive-in service, plus great food!" she says. "(I love the extra-long cheese coneys...) Sonics are popping up all over the country, I expect them to continue growing at a rapid pace."

Dollar Thrifty Automotive Group (NYSE: DTG) is a Tulsa joint, surprisingly enough devoid of a star rating, as only seven Fools have shared their opinions. There's also the usual assortment of regional banks, local communications providers, and so forth. The real surprise is the lack of literal meat-and-potatoes (or grain) industries -- it looks like the profits from those amber waves of grain go out of state for the most part.

Foolish finale
All in all, I'll have to quote the official state song by Rodgers & Hammerstein:

We know we belong to the land
And the land we belong to is grand!
And when we say
"Yeeow! Ayipioeeay!"
We're only sayin'
"You're doin' fine, Oklahoma!"
-- From "Oklahoma!"

Couldn't have said it better -- though if ever oil and gas go out of style, this region will be among the hardest hit. That's hardly a deterrent for even long-term investors today, anyhow. Do you agree? Disagree? Feel free to weigh in on the Oklahoman market -- or on any stocks at all, really -- by joining Motley Fool CAPS and blasting away with your ratings and commentary pitches. And if the Sooner State isn't your 'hood, maybe we'll come round where you live the next time.

Fool contributor Anders Bylund holds no position in any of the companies discussed here, but he does enjoy those burgers. You can check out Anders' holdings if you like, and Foolish disclosure is always red-hot.