At The Motley Fool, we poke plenty of fun at Wall Street analysts and their endless cycle of upgrades, downgrades, and "initiating coverage at neutral." While the pinstripe-and-wingtip crowd is entitled to its opinions, we've got some pretty sharp stock pickers down here on Main Street, too. (And we're not always impressed with how Wall Street does its job.)

Given that, perhaps we shouldn't be giving virtual ink to "news" of analyst upgrades and downgrades. And we wouldn't -- if that were all we were doing. Fortunately, in "This Just In," we don't simply tell you what the analysts said. We also show you whether they know what they're talking about. To help, we've enlisted Motley Fool CAPS, our tool for rating stocks and analysts alike. With CAPS, we track the long-term performance of Wall Street's best and brightest -- and its worst and sorriest, too.

Top o' the Morgan to you!
Once upon a time, a well-timed investment in Kinder Morgan Inc. (NYSE: KMI) just before it went private turned into my first-ever "two-bagger" stock. Today, the stock jocks at Janney Montgomery Scott say you've got a chance to repeat that feat (or something like it) by buying shares of Kinder Morgan's twins.

Janney initiated coverage of two additional flavors of Kinder Morgan this morning: master limited partnership Kinder Morgan Energy Partners (NYSE: KMP) and Kinder Morgan Management (NYSE: KMR). The analyst likes the former for its ownership of "more than 37,000 miles of pipeline and 180 terminals." This commanding control of America's energy infrastructure makes the company essentially a tollbooth operator, collecting a fee anytime anyone wants to ship natural gas, gasoline, oil, or other fuels through its network. Janney characterizes it as a business based on "stable, fee-based income," generating a tasty 6.2% dividend yield for its "unit" holders.

That yield's got to attract dividend-seekers. But there is one downside -- as a master limited partnership, investing in KMP involves dealing with a small paper blizzard of 1099 and K-1 forms that must be filed with the IRS at tax time. Enter Kinder Morgan Management with a solution. As a purveyor of "institutional shares" targeting institutional buyers, KMR doesn't pay cash dividends. Instead, it distributes additional shares in lieu of cash -- thus avoiding much of the tax-accounting complexity of KMP. According to Janney, there's only one other "I-Share" company out there today, Enbridge Energy Management (NYSE: EEQ). This lack of supply ensures strong demand for both of those entities.

Or so thinks Janney. But is it right?

Let's go to the tape
Initial indications look good. According to our CAPS stats, Janney ranks in the top 10% of investors we track. It's not deeply involved in natural gas investing, but the one bet it has made in the industry -- a circa-2008 recommendation of Clean Energy Fuels (Nasdaq: CLNE) -- has worked out pretty well, beating the S&P 500's performance by a good 66 percentage points to date.

But the "Kinder Morgans" may not work out so well for investors, and the reason is their price. KMI, now returned to the public markets (but struggling), costs about 23 times next year's projected earnings. Janney-fave KMR is even pricier at a forward P/E ratio of 27. And on this basis, KMP is most expensive of all -- 31 times its 2012 estimated profits.

The upshot
Meanwhile, analysts have all three stocks pegged for single-digit earnings growth for the next half-decade, which tells me that the P/E ratios on offer here are way too expensive for the growth prospects. I suspect investors at today's prices stand a snowball's chance in Texas of making money on natural gas through investing in these overpriced equities.

Fact is, if you're looking for a way to lose money on natural gas just as fast as humanly possible, and enjoy filling out extra forms at tax-time, you might as well just invest in the granddaddy of bad nat-gas investing ideas, the U.S. Natural Gas (NYSE: UNG) ETF. (Motto: "All the weak stock performance of Kinder Morgan Inc. combined with the hair-tearing tax frustration of Kinder Morgan Energy Partners.")

A better idea
On the other hand, if you want to make money in natural gas, my advice would be to avoid all of the companies discussed above, and make a beeline for ExxonMobil (NYSE: XOM) instead. At less than nine times next year's estimated earnings, the nation's largest oil and nat-gas producer sells for a mere fraction of the valuation accorded the KM-family, and it's growing faster than either KMR or KMP.

What's your favorite play on natural gas? Tell us about it below, and recommend it on Motley Fool CAPS!

Fool contributor Rich Smith does not own (nor is he short) shares of any company named above. You can find him on CAPS, publicly pontificating under the handle TMFDitty, where he's currently ranked No. 455 out of more than 170,000 members. Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.