Jim Cramer Says This 7.6%-Yielding Energy Stock Can Cover Its Dividend “and Then Some”

A caller started the lightning round of Mad Money on September 30 by inquiring about MPLX LP (NYSE:MPLX). In response, Jim Cramer said:

It’s a stock that yields 7.6% and it can cover that dividend and then some. That’s the kind of thing I’m looking for: an oil play that gives you a good yield.

Strong Cash Generation Supports Distribution Growth

MPLX LP continues to generate substantial cash from its midstream infrastructure operations. In the second quarter, the partnership reported $1.1 billion in net income attributable to MPLX and $1.78 billion in adjusted EBITDA, compared with $1.69 billion a year earlier. Net cash provided by operating activities reached $1.7 billion, while distributable cash flow was $1.5 billion.

The company paid a second-quarter distribution of $1.0765 per common unit, with distribution coverage of 1.3x. Management also expects distribution increases of 12.5% in both 2026 and 2027. The partnership ended the quarter with a consolidated debt-to-LTM adjusted EBITDA ratio of 3.7x.

The stock’s valuation also remains relatively in-line with its sector median as MPLX LP trades at 12.2x forward earnings as of October 2. Its indicated distribution yield was approximately 7.6%.

Leverage And Energy Volume Exposure

MPLX LP’s cash generation remains closely connected to the performance and utilization of its gathering, processing, transportation and logistics infrastructure. The company is continuing to invest in its natural gas and NGL operations, including the Harmon Creek III processing plant and additional Permian Basin sour-gas treating capacity. Management expects mid-single-digit adjusted EBITDA growth as additional projects enter service and utilization increases.

The partnership’s 3.7x debt-to-adjusted EBITDA ratio remains an important consideration for income-focused investors. Higher financing costs or weaker volumes across its energy infrastructure network could affect financial flexibility. MPLX also remains exposed to changes in production and throughput activity across the U.S. energy system.

Limited Hedge Fund Interest Meets Low Short-Seller Activity

According to Insider Monkey’s database tracking over 1000 hedge funds, 12 hedge funds held positions in MPLX LP in Q2, down from 15 funds in Q1. Among those hedge funds, Brave Warrior Capital held the most prominent stake with 3.18 million shares. It is worth noting that Citadel Investment Group increased its holdings in the company by a staggering 3887% to 209,147 shares. Short interest stood at 1.81% of the public float.

MPLX LP’s 7.6% indicated yield, 1.3x distribution coverage and approximately 12.2x forward earnings multiple provide the main figures behind Cramer’s focus on the stock as an income-generating oil and gas infrastructure play. The partnership’s ability to maintain cash generation while funding expansion and distributions remains central to its investment profile.

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