1 of Cramer's Top Dividend Stocks Is An Easy Buy Today

Whenever Jim Cramer speaks positively about a higher-yielding dividend stock, passive income-hungry retirees should be ready to listen up and maybe even add the name to their watchlists. Undoubtedly, the hunt for yield isn’t getting any easier amid this bull market, especially as the market strength begins to broaden out well beyond the biggest and most exciting AI (artificial intelligence) winners. 

Many of the high-yield dividend stocks have also been rising to the occasion in the past year or so. And while dividend yields do tend to fall as share prices rise (all else being equal), I do find some of these dividend stocks are still worth stashing away, even with their higher multiple and a few basis points (bps) shaved off their yields.

Arguably, the high-yield dividend stocks are “easier” to buy now that they’re on their way up, rather than their way down, or fluctuating in both directions.

Energy Transfer stock: Jim Cramer likes this high-yield dividend player

Recently, I came across a piece written by fellow 24/7 Wall St. contributor Omor Ibne Ehsan that really captured my intrigue. He highlighted a 7.54%-yielder in Energy Transfer (NYSE:ET) that received the great Jim Cramer’s blessing. He views the dividend as well-covered improvements made over time. Indeed, Cramer is right on the money when he says the firm “got its act together.” 

Indeed, it’s not every day you hear Cramer speaking positively about a name with a near-8% yield. Arguably, he’s quite critical of firms with so-called “accidentally high yields.” 

Just as share price appreciation causes lower yields, many higher yields (especially ultra-high-yielders north of 7%) tend to have been the result of considerable weakness in the share price. Either way, I’m aboard the bull bandwagon with Cramer and Omor when it comes to shares of ET.

It’s a high-yielder that’s not without its risks, but the potential rewards, which include that lofty dividend yield, I think, well outweigh them. As such, I’m also inclined to pound the table on Energy Transfer, especially as new catalysts and projects add support for the hefty dividend, which, I think, probably isn’t done growing quite yet.

ET stock looks ripe for buying after a correction

Today, shares of ET are still down close to 17% from their multi-year highs, and I think they’re worth picking up before any bounce-back causes further yield shrinkage. As the firm works hard on its Transwestern pipeline expansion while advancing other pipeline projects that’ll be additive to cash flows, I view the dividend play as having all the makings of a dividend grower whose shares can also climb significantly. 

It’s not just Jim Cramer who’s fond of the pipeline play. Strategists over at Bank of Montreal also praised ET shares as a dividend growth pick poised to outperform in 2025. Add the Street-high price target of Barclays into the equation ($25.00 per share, which entails more than 40% gains from these levels), and it’s clear that there’s far more to Energy Transfer than just the size of its dividend yield.

Indeed, it’d certainly be nice to capture a 40% gain in addition to a 7.5% yield. And while most sell-side analysts on Wall Street are upbeat on the name, I do think that investors should be ready for volatility. The road higher probably won’t be all too smooth.

The correction at the start of the year, while overblown, may have been concerning for some. In any case, I view ET stock as way too cheap to ignore at just 13.6 times trailing price-to-earnings (P/E) or 11.1 times forward P/E.

While I’m not against loading up at today’s levels, I do think Cramer’s strategy for getting in is most prudent. He urged investors to buy at some at 7%, a bit more at 8%, and more at 9%, and so on. That’s a dollar-cost averaging strategy I’d look to put to work as well.