"ETE is still projected to grow at 2X the rate of ETP. "
When ETP is growing, ETE will do better, but if ETP slows down, the impact will be magnified in ETE. Even in an irrational market you should always assume there is a reason for pricing disparities until there is concrete evidence that the market has it wrong.
In this case greater yield comes with greater risk. As long as you're OK with that, good luck.
Although ETE's current annualized 3.8% yield to our fair value estimate may be low compared with those of standard MLPs, which have historically averaged 6%-8%, ETE affords investors the chance to leverage the growth of the underlying business. As new projects increase ETP's cash available for distributions, ETE's unitholders will benefit from the leverage provided by the general partner's ownership of ETP's incentive distribution rights and will see their cash distributions increase faster than those of common unitholders of ETP. All else being equal, this should translate to greater stock price appreciation for ETE relative to ETP, at the price of a lower distribution yield. The downside, of course, is that leverage works both ways, and any significant slowdown in distribution growth at ETP has a magnified impact on ETE's growth rates. Moreover, a distribution cut at ETP would be devastating for ETE.