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Better Buy: Sirius XM vs. Annaly Capital Management

By David Hanson and Michael Finarelli - Mar 22, 2014 at 10:00AM

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We've collected the most popular companies amongst Fool.com readers and put them head-to-head in a good old-fashioned challenge we're calling The Motley Fool's Better Buy Tournament.

In today's ­second-round match-up of The Motley Fool's Better-Buy Tournament, Sirius XM squares off against Annaly Capital Management in a battle to determine which stock is the better buy now. The 64-company tournament pits two Motley Fool analysts against each other as they make the case for their stocks with the winner determined by you, the readers.

With the recent breaking news that John Malone dropped his bid for Sirius XM ( SIRI -0.64% ), long-term shareholders have reason to cheer: This lucrative business will continue to monopolize the satellite-radio space, and shareholders can participate directly. At 25 million paid subscribers and growing, Sirius should continue to leverage its massive user base to drive increased profits. With $0.17 of every sales dollar flowing through as free cash and the ability to determine its own destiny, Sirius is a great way to gain exposure in this cash-rich market, says Motley Fool analyst Michael Finarelli.

Motley Fool financials analyst David Hanson believes Annaly Capital Management ( NLY -0.49% ) should move on to the next round because of the stock's ultra-cheap price today. Annaly trades at a discount to book value and has historically traded at a premium to book value. The stock's cheap price, coupled with the fact that co-founder Wellington Denahan is still steering the ship, makes for a compelling opportunity. In addition, David points to the company's historically low leverage levels as an opportunity for the company to be strategic and add value for shareholders.

Watch these analysts square off in the following video, and then vote for a winner. Then check out the other companies in The Motley Fool's Better-Buy Bracket

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Cast your vote in the poll below the video!

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.

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Stocks Mentioned

Sirius XM Holdings Inc. Stock Quote
Sirius XM Holdings Inc.
SIRI
$6.21 (-0.64%) $0.04
Annaly Capital Management, Inc. Stock Quote
Annaly Capital Management, Inc.
NLY
$8.17 (-0.49%) $0.04

*Average returns of all recommendations since inception. Cost basis and return based on previous market day close.

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