Based on the aggregated intelligence of 180,000-plus investors participating in Motley Fool CAPS, the Fool's free investing community, the 10 stocks below are the highest rated in the pipeline industry.

CAPS contains more than just the crowd's opinions. The votes of CAPS' best-performing members, known as All-Stars, count more in shaping each company's rating than do the picks of their poorer-performing peers. That way, the highest rated companies are not just the most popular companies in the industry -- in this case Kinder Morgan Energy Partners (NYSE: KMP) -- but are truly the best of the best. You can then intelligently use members' collective wisdom to make better decisions and find hidden gems you may never have otherwise heard of.

The pipeline industry has been going through a wave of consolidation as low rates and new opportunities in the natural gas market spur companies to pursue economies of scale. The latest acquisition was also the largest acquisition ever in the industry, with Kinder Morgan buying El Paso. Analysts are continuing to speculate on which company will be the next pipeline to get acquired.

The highest-rated pipeline stock is...
 Looking at the aggregate data, we see that our community rates Tesoro Logistics (NYSE: TLLP) above the rest -- and for good reason. As CAPS player TMFDeej wrote in April:

I'm normally not one to like IPOs, but when the IPO is in a spin-off I pay attention. For the first time in a long while I tried to get in on an IPO a couple of weeks ago, CVR's spin-off of its nitrogen fertilizer operations (UAN). ... What's not to like about a spun-off, nitrogen fertilizer producer that plans to pay a massive dividend in an era of high food prices?

Here's another interesting one, Tesoro is spinning off Tesoro Logistics in an IPO this week under the symbol TLLP. The new company plans to "own, operate, develop and buy various assets involved in distribution, transportation and storage of crude oil and refined products." In short it's a pipeline operator, a sector which I like. Scheduled to begin with a quarterly pay-out of $0.3375/share, TLLP will have an initial yield of just under 6.5% at its IPO price of $21.

Here are the rest of the 10 highest-rated companies in the industry along with their CAPS rating:

 

Company

CAPS Rating (out of 5)

Market Cap (in millions)
1 Tesoro Logistics ***** $808
2 Enbridge Energy Partners (NYSE: EEP) ***** $8,173
3 Crestwood Midstream Partners ***** $1,140
4 Chesapeake Midstream Partners ***** $3,642
5 Western Gas Partners (NYSE: WES) ***** $3,230
6 Kinder Morgan Energy ***** $6,482
7 DCP Midstream Partners ***** $1,928
8 Buckeye Partners (NYSE: BPL) ***** $6,189
9 Enterprise Products Partners (NYSE: EPD) ***** $37,952
10 Energy Transfer Partners (NYSE: ETP) ***** $9,575

Source: Motley Fool CAPS, as of Nov. 7.

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