KMP and KMI have had good run-ups. I am usually an optimist but right now I think KMP is near its high(IMO). No doubt the KMP distribution is going to be raised to close to $3.00 this year and no doubt Kinder hikes KMI's dividend to $2.00 or higher. They are cash machines and should do decent this year but they aren't at the top of my list in terms of strong buys. All, in all, KMP, IMO, has probably gotten to the size where the law of large numbers kicks in and it becomes very hard to grow much more than 10% or 15%, however, betting against Kinder(i.e. going short) is probably not a smart thing. I don't think anyone knows right now how accretive the Yates field purchase will be, with Kinder's aggressive hedging and high oil prices right now, I certainly think it will be a very substantial boost...but trading in the low 5% is certainly new territory for MLP's.
A professional recommendation to sell based on "valuation" when the stocks are yielding +5% with 8-10% annual growth is foolish IMO. In fact, this whole "grading" of stocks is foolish because it doesn't consider every investor's situation. A hold might be a buy for a conservative investor, while a hold might mean a sell for another.
Why would you sell a stock that is yielding 5% and growing 8-10% just because it's up 40% year over year? The only reason is a belief that the fundementals have changed. I sure don't see that with KMP.
The only reason MLP's traded at levels yielding 7+% yields is because of the lack of understanding and fear. People were suspicious of any "complicated" accounting schemes in light of Worldcom, Tyco, and Enron. This depressed the stock prices and increased the yields.
When I first bought KMP it was yielding 7+%. I found others like PAA and EEQ through stock screens. These proved to be great investments.
Personally, I believe that this is a good time to be into higher beta stocks, but keep a core of quality MLP's. I will convert high beta to MLP's should the market faulter or if MLP's dip too far. All of this depends on your individual situation, so this may not be appropriate for everyone.