Despite facing industry headwinds, Sirius XM (SIRI 2.60%) is still a well-known company that many people might be familiar with. It's probably on investors' radars, mainly due to the fact that Warren Buffett-led Berkshire Hathaway owns 37% of Sirius XM's outstanding shares.
The company's stock price has tanked 56% in the past five years (as of Sept. 25). But income-seeking investors might still be interested in owning a piece of this radio business. Here's how many shares of Sirius XM stock you'd need to generate $10,000 in yearly dividends.
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Passive income stream
Sirius XM currently pays a quarterly dividend of $0.27 per share. On an annualized basis, this comes out to $1.08 per share. Investors who want to make $10,000 in passive income from the company need to own about 9,259 shares. Based on the current stock price, this would require an investment of more than $207,000.
The company's dividend yield sits at a hefty 4.83%. That's almost four times greater than the average of the S&P 500.
Bearish view
There doesn't appear to be a near-term threat to the dividend. Sirius XM is consistently profitable, producing $402 million in free cash flow during the three-month period that ended June 30.
However, the business continues to register declining subscriber and revenue bases. There is heightened competition from internet-based streaming platforms that give people plenty of options for listening to audio content.
Despite shares trading at a cheap valuation, investors might want to think twice before adding Sirius XM to their portfolios.
