Mad Money

Cramer Picks His Fave Pipeline Play

Cramer's Pipeline Face-off: KMP vs. PAA

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.


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

Call Cramer: 1-800-743-CNBC

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