The year is nearing its end, and now's a good opportunity to look at what happened throughout 2012 to the stocks you follow. If you know the important things that a company achieved, as well as any challenges it failed to overcome, then you can make a better decision about whether it really deserves a spot in your portfolio.

Today, I'll look at Sirius XM (NASDAQ:SIRI). The satellite-radio company is a pioneer in its industry, but with wireless Internet radio coming on strong, Sirius has ratcheted up its game to compete in its attempt to maintain dominance of the airwaves. Shareholders certainly think the company will succeed, but how has Sirius dealt with its challenges? Read on to find out more about what moved shares of Sirius XM this year.

Stats on Sirius XM

Year-to-date stock return


Market cap

$15.1 billion

Revenue, past 12 months

$3.29 billion

Net income, past 12 months

$3.39 billion*

1-year revenue growth


1-year normalized net income growth


CAPS rating (out of 5)


Source: S&P Capital IQ.
*Net income includes one-time impact of tax benefits, while normalized net income growth excludes that impact.

How Sirius XM knocked it out of the park in 2012
Sirius got things off to a great start early in the year, as it implemented its first-ever base-rate increase. Given the company's willingness to pay up for key talent like Howard Stern and Oprah Winfrey, subscribers have been happy to fork over more money, as subscriber growth has continued at a strong pace.

Internet-based radio options have posed a potential threat to Sirius for quite a while, with Pandora (NYSE:P) and its industry-leading streaming music service drawing competition from Microsoft's (NASDAQ:MSFT) Xbox Music service and Google's (NASDAQ:GOOGL) Google Play. Even Apple (NASDAQ:AAPL) may get into the game in the near future, as it reportedly negotiates with record labels for streaming rights. At least so far, though, Sirius hasn't suffered much from those threats, and it plans its own streaming service to respond to the competitive pressure.

Even with the company's share price run-up, Sirius hasn't been afraid to return money to shareholders. Earlier this month, it announced a $2 billion buyback after having gotten a revolving credit facility to raise $1.25 billion. It will also pay a $0.05-per-share special dividend that will amount to another $325 million in total. With longtime stakeholder Liberty Media poised to take majority control of the company, Sirius has come a long way from its sub-$1 days during the financial crisis.

Sirius has done extremely well by investors in 2012. As the company enters a new chapter in its history, it'll be interesting to see how Sirius keeps coping with competition next year and beyond.

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This article represents the opinion of the writer, who may disagree with the “official” recommendation position of a Motley Fool premium advisory service. We’re motley! Questioning an investing thesis -- even one of our own -- helps us all think critically about investing and make decisions that help us become smarter, happier, and richer.