Meet the Stock-Split Stock Warren Buffett Can't Stop Buying. And It Still Offers 58% Upside, According to 1 Wall Street Analyst.

Warren Buffett, the renowned investor and CEO of Berkshire Hathaway, has been quietly amassing shares of a unique stock that has caught the attention of Wall Street analysts. This stock, Sirius XM Holdings (SIRI), has recently announced a reverse-stock split, which has raised eyebrows among investors. Despite this unusual move, Buffett continues to increase his stake in the company, indicating his confidence in its long-term prospects.

Sirius XM Holdings is a satellite radio operator that has been struggling in recent years. However, Buffett sees potential in the company's industry dominance and recurring revenue streams. With over 33 million paying subscribers and a strong ad-supported streaming music service, Pandora, Sirius XM generates a healthy amount of free cash flow. The company's advertising business is also staging a recovery, as evidenced by a 10% sequential increase in ad revenue.

One of the key factors contributing to the attractiveness of Sirius XM Holdings as a long-term investment for Buffett is its dividend history and payout ratio. The company pays a healthy dividend that yields roughly 3.9% and has increased 166% over the past 10 years. With a payout ratio of just 28%, there is plenty of potential for that dividend to grow in the years and decades to come.

Buffett is also attracted to Sirius XM's valuation. The company is currently selling for just 8 times earnings and 1 times sales, which is the very definition of attractively priced. This valuation, combined with the company's strong fundamentals and growth prospects, makes Sirius XM an appealing investment opportunity.

Analyst Matthew Harrigan from Benchmark is bullish on Sirius XM Holdings, reaffirming his buy rating with a price target of $43. This represents potential upside of 58% compared to Monday's closing price. Harrigan cites the market disconnect resulting from the recent merger with tracking stock Liberty Sirius XM and the company's strategic initiatives as reasons for his optimism.

In conclusion, Sirius XM Holdings is a unique investment opportunity that has caught the eye of Warren Buffett. Despite its recent struggles, the company's industry dominance, recurring revenue streams, attractive dividend, and undervalued stock price make it an appealing long-term investment. With a price target of $43 from analyst Matthew Harrigan, there is still significant upside potential for investors who follow in Buffett's footsteps and buy shares of this stock-split stock.