GO
Loading...

Cramer Picks His Fave Pipeline Play

Cramer turned his attention to two high-yielding master limited partnerships on Monday, including Kinder Morgan Energy Partners and Plains All American Pipeline .

Both names are worth considering, but between the two, Cramer prefers KMP. It has more diversification, which bodes well for the company in the long-term. But it also has plans to purchase El Paso Energy. The deal is expected to close in the next quarter of next year and while Cramer thinks it’s “brilliant,” he noted there are five parties involved in the transaction and it can be a little confusing to follow. Therefore, he worries the deal might be a distraction and could increase the odds this stock temporarily stumbles.

So while KMP is his favorite pipeline play, Cramer might choose PAA in the short-term. PAA has several near-term catalysts, including a series of acquisitions totally $2.3 billion and plans to grow its distribution by 8 to 9 percent next year.

But while PAA could produce slightly better gains in the next six to 12 months, Cramer thinks KMP will be the long-term winner overall.

Symbol
Price
 
Change
%Change
KMP
---
PAA
---

When this story was published, Cramer's charitable trust owned KMP.

Call Cramer: 1-800-743-CNBC

Questions for Cramer? madmoney@cnbc.com

Questions, comments, suggestions for the Mad Money website? madcap@cnbc.com

Contact Mad Money

  • Showtimes

    U.S.
    Monday - Friday 6p ET
    Australia
    Saturday 8a, 1p, 7p SYD
    Sunday 12a, 1a, 8a, 7p SYD
    New Zealand
    Saturday 10a, 3p, 9p NZ
    Sunday 2a, 3a, 10a, 9p NZ
  • Jim Cramer is host of CNBC's "Mad Money" and co-anchor of the 9 a.m. ET hour of CNBC's "Squawk on the Street."

Mad Money Features

  • Grab the latest CNBC gear from the NBCUniversal Store!

  • Get a behind-the-scenes look at how Cramer formulates his investment advice. "Inside the Madness" is a column, which features e-mails and more with Cramer and his researcher Nicole Urken.

  • You’ve always wanted to hit the “Hallelujah!” button. Here’s your chance.

Mad Money Moments

Cramer's New Book