On Oct 3, we issued an updated research report on Sirius XM Holdings Inc. (SIRI - Free Report) . The stock has been upgraded to a Zacks Rank #3 (Hold) from a Zacks Rank #4 (Sell).
Shares of Sirius XM have gained 9.5% in the last six months versus the industry’s decline of 2.4%.
Reasons Behind the Upsurge
Sirius XM has healthy net subscriber growth. In fact, the year-end is anticipated to witness further ascent in this respect. The company raised full-year 2017 Self-pay net subscriber additions to 1.4 million (previous guidance: 1.3 million).
The company’s guidance for 2017 also buoys optimism. Revenues in 2017 have been increased to $5.375 billion (previous guidance: $5.3 billion). Adjusted EBITDA outlook has been raised to $2.05 billion (previous view: $2.025 billion), while free cash flow remains unchanged at around $1.5 billion. Warren Buffett’s decision to elevate his stake in the company is also encouraging.
The company recently acquired a 19% stake in Pandora Media, Inc. (P - Free Report) , following completion of the $480 million strategic investment in this online music streaming company. Sirius XM has also received three board seats (including that of the Chairman) in Pandora.
The company’s efforts to augment shareholder’s wealth through dividends and buybacks are also impressive. Most recently, the company hiked quarterly dividend by 10%to 1.1 cents per share (or 4.4 cents annually) from a penny (or 4 cents annually). Approved by the company’s board of directors, the dividend payment will be made on Nov 30, 2017 to stockholders of record as of Nov 9.
In view of the above mentioned positives, we believe investors should currently retain the Sirius XM stock.
Zacks Rank & Key Picks
Sirius XM currently carries a Zacks Rank #3. Some better-ranked stocks in the Consumer Discretionary sector are Gray Television, Inc. (GTN - Free Report) and Nexstar Broadcasting Group, Inc. (NXST - Free Report) holding a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Shares of Gray Television and Nexstar Broadcasting have gained 12.4% and 3.5%, respectively, in the last three months.
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