“Jim Cramer recently highlighted Energy Transfer LP (NYSE: ET) during a Mad Money lightning round, describing it as a ‘very inexpensive stock’ and a ‘great pipeline company’ with a compelling 7.3% yield. He encouraged investors to buy, calling it the ‘sweet spot’ for the current market environment and noting the company’s strong operational position under CEO Kelcy Warren.”
Jim Cramer Highlights Energy Transfer’s Appeal in Recent Mad Money Segment
During a recent episode of Mad Money, Jim Cramer fielded a question from a viewer seeking his updated take on Energy Transfer LP (NYSE: ET). The caller referenced Cramer’s prior positive stance from November 2025, when he described the stock as being in the “sweet spot” for investment. Cramer doubled down on his bullish view, stating unequivocally that investors should not hesitate but instead buy the shares.
He emphasized several key attributes that make ET stand out. First, the stock’s yield, which he pegged at around 7.3%, provides substantial income potential in a market where many income-oriented investments offer far lower returns. This high distribution rate appeals to income-focused investors seeking reliable cash flow amid economic uncertainty. Second, Cramer repeatedly called the stock “very inexpensive,” pointing to its valuation metrics that remain attractive relative to broader market averages and even some peers in the midstream sector.
Cramer also praised the company’s operational strengths, referring to it as a “great pipeline company.” He specifically mentioned CEO Kelcy Warren, acknowledging past differences but moving past them to endorse the leadership’s execution. Energy Transfer has built one of the largest and most diversified midstream networks in North America, transporting natural gas, natural gas liquids (NGLs), crude oil, and refined products through an extensive system of pipelines, storage facilities, processing plants, and export terminals.
The company’s footprint is heavily concentrated in high-production regions such as Texas and the Midcontinent, positioning it to benefit from sustained energy demand. Operations span from wellhead gathering and processing to transportation and delivery to refineries and end markets. This integrated model generates fee-based revenue streams that are largely insulated from commodity price swings, providing stability even during volatile periods for oil and gas prices.
Energy Transfer’s scale contributes to its resilience and growth potential. With over 16,000 employees and a vast asset base, the company handles massive volumes of hydrocarbons daily. Recent expansions and acquisitions have further strengthened its position in key basins, including the Permian and Eagle Ford shale plays. These assets support increasing throughput volumes, driving higher revenue and cash flow generation over time.
Valuation remains one of the most compelling aspects of the investment case. The stock trades at levels that reflect a discounted multiple compared to historical norms and industry averages. Its trailing price-to-earnings ratio stands in the low-to-mid teens, while the forward P/E is even more attractive, suggesting room for multiple expansion if earnings continue to grow. The price-to-sales ratio hovers below 1.0, underscoring the market’s conservative pricing of the company’s top-line performance.
A key attraction for many investors is the dividend profile. Energy Transfer has maintained a high payout policy, delivering consistent quarterly distributions to unitholders. The trailing dividend yield is approximately 7.1-7.3%, with the most recent declaration at $0.335 per unit for the upcoming payment. The payout ratio exceeds 100% on a GAAP basis, but adjusted metrics that account for maintenance capital and other factors show coverage that supports ongoing increases. Management has demonstrated a commitment to growing the distribution over time, albeit at a measured pace following earlier deleveraging efforts.
Key Financial Metrics for Energy Transfer LP (ET)
| Metric | Value |
|---|---|
| Current Share Price | ~$18.46 |
| Market Capitalization | $63.6B |
| Enterprise Value | $124.0B |
| Trailing P/E Ratio | 14.82 |
| Forward P/E Ratio | 11.75 |
| Price/Sales (ttm) | 0.80 |
| Price/Book | 1.83 |
| Dividend Yield (Trailing) | 7.10% |
| Dividend Yield (Forward) | 7.15% |
| Payout Ratio | 104.40% |
| Revenue (ttm) | $79.76B |
| EPS (Diluted, ttm) | $1.25 |
| Debt/Equity (mrq) | 135.70% |
| Operating Cash Flow (ttm) | $10.84B |
The high yield and low valuation combine to create a favorable risk-reward profile for patient investors. Midstream assets like those owned by Energy Transfer tend to perform well in environments where energy infrastructure remains essential regardless of short-term commodity fluctuations. Growing natural gas exports, rising domestic consumption, and stable demand from industrial users all support volume growth across the network.
While the sector faces challenges such as regulatory scrutiny on pipelines, interest rate impacts on debt-heavy balance sheets, and potential shifts in energy transition policies, Energy Transfer’s diversified portfolio and fee-based model mitigate many of these risks. The company’s leverage has improved in recent years through disciplined capital allocation, with a focus on high-return projects and debt reduction.
Cramer’s endorsement underscores a broader view that certain high-yield energy infrastructure names offer compelling value in the current landscape. With its robust asset base, consistent cash generation, and attractive income stream, Energy Transfer continues to draw attention from investors seeking both yield and potential capital appreciation.
Disclaimer This article is for informational purposes only and does not constitute investment advice, recommendations, or solicitations to buy or sell securities. Investors should conduct their own due diligence and consult with qualified financial professionals before making any investment decisions.