From tiny acquisitions to massive conglomerate combinations, Wall Street's urge to merge remains strong even when the economy's weak. How can we tell the deal-makers from the deal-breakers?

Breaking down the buildup
To help, we'll turn to the 120,000-plus investors in Motley Fool CAPS. Our data suggests that top-rated stocks offer the best opportunity to capture the best returns. So, a combination of two companies with high CAPS ratings should bode well for the new firm's future results, while a highly rated company that joins a lower-rated one may benefit one set of investors more than the other.

Here are a handful of recently announced deals, and the ratings -- when available -- for each participating company on CAPS' five-star scale:

Acquirer

CAPS Rating
(out of 5)

Target

CAPS Rating
(out of 5)

Deal Price

Valeant Pharmaceuticals

***

Dow Pharmaceutical Science

NR

$285 million

Cohu

**

Rasco

NR

$80 million

Capital One Financial (NYSE:COF)

*

Chevy Chase Bank

NR

$520 million

3M (NYSE:MMM)

*****

Abrasivos

NR

undisclosed

Fuel Tech (NASDAQ:FTEK)

****

Advanced Combustion Technology

NR

$22 million

L-3 Communications (NYSE:LLL)

****

International Resources Group

NR

undisclosed

Morningstar (NASDAQ:MORN)

*****

10-K Wizard

NR

$12.5 million

CAPS ratings courtesy of Motley Fool CAPS; NR = not rated.

A merger of equals?
The government intended for banks participating in the TARP bailout program to use that money for lending purposes to ease the credit crisis. That's not happening. Instead, it's being used to fuel takeovers of smaller banks to bolster the deposit base of the acquirer.

Capital One Financial, which didn't dabble much in mortgages, is in a healthier position than many of its peers, although it has broad credit card exposure and received more than $3.5 billion in bailout money last month. Its purchase of Chevy Chase Bank will give it the same access to potentially huge tax write-offs that Wells Fargo (NYSE:WFC) received when it bought Wachovia, and that PNC (NYSE:PNC) got when it bought National City. Capital One will also get the $450 million that Chevy Chase received from the TARP.

As maddening as the misuse of these programs is -- in spirit, if not in letter -- the banks making the moves are smart to use the loopholes the government has given them. CAPS member nerd1951 figures Capital One will emerge from the credit storm stronger:

I think that CapitalOne will weather the financial storm. They just picked up Chevy Chase Bank with $11 Billion in deposits for 420 million in cash plus some stock. ... This will make CapitalOne a full service bank with a huge presence in the Washington DC area.

Sticking it to the competition
Best known for its Stick-It notepads and Scotch brand tape, 3M is not alone in feeling the economic downturn in the office supply industry. Just the other day, Office Depot announced it was closing more than 100 stores, slashing 2,200 jobs, and halving to 20 the number of new stores it would open. Yet CAPS member BSHumphreyII is a 3M bull:

Highly diversified, and they crowd out the competition in both consumer and commercial products. They can play with low margins that let them undercut smaller competitors.

This is not a stock that typically moves much, but it's underpriced now and will probably outperform most of the market in the early stages if this rally.

A value-added offer
What's your take on these deals? Let us know on Motley Fool CAPS. And while there, you can start your own research on these or other stocks. Read a company's financial reports, scrutinize key data and charts, and examine the comments your fellow investors have made -- all from a stock's CAPS page. There's more than you think.

3M is a Motley Fool Inside Value selection. Morningstar is a Motley Fool Stock Advisor pick. The Fool owns shares of Morningstar. Try any of our Foolish newsletters today, free for 30 days.

Fool contributor Rich Duprey does not have a financial position in any of the stocks mentioned in this article. You can see his holdings here. The Motley Fool's 

3M is a Motley Fool Inside Value selection. Morningstar is a Motley Fool Stock Advisor pick. The Fool owns shares of Morningstar. Try any of our Foolish newsletters today, free for 30 days.

Fool contributor Rich Duprey does not have a financial position in any of the stocks mentioned in this article. You can see his holdings here. The Motley Fool's disclosure policy wears a helmet when it wheels and deals.