10 Best US Stocks to Buy Under $5

5. Sirius XM Holdings Inc. (NASDAQ:SIRI)

Number of Hedge Fund Holders: 33

Current Share Price: $2.91

Sirius XM Holdings Inc. (NASDAQ:SIRI) is a communication services company that operates as an audio entertainment company. Its Sirius XM segment provides music, sports, entertainment, comedy, talk, news, traffic and weather channels, and other content. It also distributes satellite radios through automakers, retailers, and its website.

It is one of the stocks worth paying attention to as it moves to merge with Liberty Media Corporation , creating a new public entity operating under the Sirius XM brand. This restructuring aims to simplify the company’s organizational framework and establish an independent entity that will persist in providing a varied selection of live, instant, and selected audio entertainment and services to a North American market.

While Sirius XM Holdings Inc. (NASDAQ:SIRI) has taken a significant beating over the past few years, it remains a firm favorite for billionaire investor Warren Buffett, who has been ramping up stakes through his investment firm Berkshire Hathaway. The investment comes from Sirius, which has posted double-digit revenue growth since 2014 and has returned significant value to shareholders through dividend payments.

Sirius XM Holdings Inc. (NASDAQ:SIRI) stands out as a good choice for investors looking for steady income due to its strong track record of dividend increases. For seven straight years, the company has been raising its dividends, positioning itself as one of the top dividend picks below $5. At present, it pays a quarterly dividend of $0.0266 per share, boasting a dividend yield of 3.42% as of August 23.

The solid track record in dividend payments comes from SiriusXM X.M. generating 10-figure free cash flow over the last few years. In an era where traditional media outlets are battling to remain viable, Sirius XM Holdings Inc. (NASDAQ:SIRI) offers a bargain by allocating funds toward online projects. It’s currently valued at less than ten times its trailing earnings. This earnings ratio is still considered fair when considering Sirius XM’s inflated market value.

During the second quarter of 2024, Sirius XM Holdings Inc. (NASDAQ:SIRI) saw a significant increase in interest from top-tier money managers. According to Insider Monkey’s database, the number of hedge fund positions in the company rose from 17 to 33. These investments are collectively valued at approximately $530 million.