Berkshire Hathaway’s 37% Stake in Sirius XM Underlines 5.3% Yield and 6.6x P/E
Berkshire Hathaway amassed a 124.8 million-share stake in Sirius XM equal to over 37% of its outstanding shares. The satellite-radio operator generated $715 million in free cash flow through nine months of 2025, supports a 5.3% dividend yield and trades at 6.6x forward earnings.
1. Subscriber Base Erodes as Streaming Platforms Gain Traction
Sirius XM reported a decline in its satellite radio subscriber base to 33 million at the end of Q3 2025, representing a 1% year-over-year drop. This marks the third consecutive quarterly decline in self-pay subscribers, driven primarily by weaker U.S. auto sales and intensified competition from internet streaming services. Promotional subscriptions tied to new vehicle purchases, which historically converted into long-term self-pay subscribers at a 70% rate, have provided fewer growth opportunities as chassis volumes fell by 4% across key U.S. light-vehicle segments. As a result, net additions shrank to just 150,000 subscribers in the quarter, compared with 400,000 in the same period a year earlier.
2. Attractive Yield and Valuation Capture Value Investor Attention
Despite subscriber headwinds, Sirius XM’s financial profile remains compelling for income-focused investors. The company generated $715 million in free cash flow through the first nine months of 2025, comfortably covering $274 million in dividend payments. At a current dividend yield of 5.3%, more than four times the S&P 500 average, and a forward price-to-earnings ratio near 6.6x, the stock trades at a 45% discount to its five-year average valuation. With fixed transmission and equipment costs representing roughly 30% of total expenses and subscription revenue accounting for 76% of net sales, the business model offers predictable cash flows even in slower economic cycles.
3. Buffett’s 37% Stake Underscores Monopoly Advantage
Berkshire Hathaway accumulated a 124.8 million-share position in Sirius XM—over 37% of outstanding shares—during the three years leading up to Warren Buffett’s retirement in late 2025. The investment legend cited Sirius XM’s exclusive satellite-radio licensing as a key moat, despite competition from Spotify and Apple Music. The company holds over 50 satellite licenses covering the contiguous U.S., enabling it to maintain pricing power for its core offering. With advertising via Pandora contributing just 20% of net revenue and satellite subscriptions driving the remainder, Sirius XM’s cash flows are insulated from ad-market cycles and bolster its capacity for share buybacks alongside its high dividend payout.