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Should I Buy Sirius XM Stock?
SIRISirius XM(SIRI) The Motley Fool·2025-02-23 10:02

Core Viewpoint - Sirius XM Holdings operates a legal monopoly in satellite radio in the U.S., but faces competition from internet-based media, which limits its market dominance [1][5]. Company Overview - Sirius XM is characterized by a niche in satellite radio, appealing particularly to long-distance drivers who prefer uninterrupted service [3]. - The company offers a dividend of 1.08pershareannually,resultinginadividendyieldof4.31.08 per share annually, resulting in a dividend yield of 4.3%, significantly higher than the S&P 500 average of 1.2% [4]. - The stock's P/E ratio is approximately 8, indicating a low valuation that may attract certain investors [4]. Financial Performance - In 2024, Sirius XM's revenue was 8.7 billion, reflecting a 3% decline, while its subscriber base of 33 million decreased by 1% year over year [5]. - The company incurred a 3.5billionrestructuringchargeduetoitsmergerwithLibertyMedia,leadingtoanetlossof3.5 billion restructuring charge due to its merger with Liberty Media, leading to a net loss of 2.1 billion in 2024, a significant drop from a profit of 988millionin2023[6].InvestmentInterestBerkshireHathawayhasincreaseditsstakeinSiriusXM,holdingover117millionshares,whichconstitutesabout35988 million in 2023 [6]. Investment Interest - Berkshire Hathaway has increased its stake in Sirius XM, holding over 117 million shares, which constitutes about 35% of the company's outstanding shares [7]. - Despite the company's financial challenges, Berkshire's interest may stem from its need for suitable investments, given its substantial liquidity of around 325 billion [8]. Investment Strategy - Sirius XM may not provide high returns, but it offers a stable dividend yield and a low P/E ratio, making it appealing for income-focused investors [9][12]. - The stock is suggested for those prioritizing wealth preservation and income generation rather than growth, as it presents a more attractive payout compared to the S&P 500 [10][12].