GO
Loading...

Cramer: This Energy Company’s Payout Should Rise, Not Fall

Linn Energy was hammered on Monday, dropping more than 5 percent after a negative article by Barron's over the weekend.

Linn currently sports an 8.8 percent yield at current levels. However, the article said Linn "may be the country's most overpriced energy producer" and hinted that the stock's distribution might be in danger.

Source: Linn Energy

While Jim Cramer doesn't think there is anything wrong with being skeptical about a super high-yielding stock, he pointed out that Linn plans to raise its payout by 6 percent this year, not cut it.

In fact, Cramer's charitable trust used the weakness Monday to add to its position in Linn Energy.


---------------------------------------------------------
Read More from Mad Money with Jim Cramer
Jim Cramer: The Anti-Buffetts Are Back
Cramer: What Can Still Be Bought?
Cramer's Game Plan for Week Ahead
---------------------------------------------------------

The company's CEO, Mark Ellis, told "Mad Money" he thought the article was misleading, and he disputed the assertion that its units may be worth far less than the current quote.

"We've had three different analyses done. They're all coming in with valuations in the high 30s to the mid-40s for the company," he said. "None of the valuations we've seen by any one of the independent parties is anywhere close to what was represented over the weekend in the Barron's article."


Disclosure: When this article was published, Cramer's charitable trust owned Linn Energy.


Call Cramer: 1-800-743-CNBC

Questions for Cramer? madmoney@cnbc.com

Questions, comments, suggestions for the "Mad Money" website? madcap@cnbc.com

Symbol
Price
 
Change
%Change
LINE
---
LNCO
---

Featured

Contact Mad Money

  • Showtimes

    U.S.
    Monday - Friday 6p ET
    Australia
    Saturday 8a, 1p, 7p SYD
    Sunday 12a, 1a, 8a, 7p SYD
    New Zealand
    Saturday 10a, 3p, 9p NZ
    Sunday 2a, 3a, 10a, 9p NZ
  • Jim Cramer is host of CNBC's "Mad Money" and co-anchor of the 9 a.m. ET hour of CNBC's "Squawk on the Street."

Mad Money Features

  • Grab the latest CNBC gear from the NBCUniversal Store!

  • Get a behind-the-scenes look at how Cramer formulates his investment advice. "Inside the Madness" is a column, which features e-mails and more with Cramer and his researcher Nicole Urken.

  • You’ve always wanted to hit the “Hallelujah!” button. Here’s your chance.