Many investors appreciate receiving dividends from companies. They often look at the current payout, the history of increases, and the company’s financial statements to determine the dividend’s sustainability.
That’s a fine place to start. But what if you want to know how much you’ll receive in annual dividends?
Sirius XM (SIRI -6.71%) pays regular quarterly dividends. How many shares do you need to own to receive $1,000 annually?
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Annual payouts
Sirius XM recently executed a 1-for-10 reverse stock split. Adjusted for the split, the company now pays about a $0.27 per share quarterly dividend.
That works out to $1.08 annually. Dividing $1,000 by the $1.08 annual dividend equals 926 shares. With a stock price of $23.10 as of Jan. 7, that means you’ll have to invest about $21,400. Of course, that assumes the company keeps dividends constant.
Sirius XM currently produces enough free cash flow (FCF) to sustain dividends. It had FCF of $499 million during the first nine months of 2024, and it paid out $51 million in dividends.
The stock has an above-market dividend yield of 4.7%. That’s nearly four times the S&P 500‘s 1.2%.
Sirius XM operates its namesake subscription satellite radio business, and the Pandora podcast streaming segment, which primarily generates revenue via advertising.
In the face of competitive pressures, the company’s revenue has been sluggish. Third-quarter revenue dropped 4.4% to $2.2 billion. Management also lowered its 2024 revenue expectation by $75 million, to under $8.7 billion. The stock price has dropped an eye-popping 60% over the last year.
While the dividend yield may tempt some investors, given the lackluster results, I’d stay away from the stock.
