Best Stock to Buy Right Now: Sirius XM vs. Lululemon

Sirius XM (NASDAQ: SIRI) has gotten a lot of attention this year. That's primarily because Warren Buffett-led Berkshire Hathaway is a large investor, owning 37% of the satellite radio operator's outstanding shares. But the stock has been wildly disappointing, down 66% in the past three years (as of Dec. 3).

Then there's Lululemon Athletica (NASDAQ: LULU). The leader in athleisure apparel was a high-flying stock not too long ago. However, it's also under pressure, and shares trade 64% below their peak.

Investors are looking at some potential buy-the-dip opportunities here. Which of these stocks is the better one to buy right now? The answer is as clear as day.

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It's difficult to be bullish on Sirius XM

When the Oracle of Omaha's conglomerate has a stake in a business, it's typically a good idea for the average investor to take a closer look. For what it's worth, though, investors might only find one obvious reason to like Sirius XM. And that's the valuation. The shares are dirt cheap right now. Investors can scoop up the stock at a bargain forward price-to-earnings (P/E) ratio of 6.9.

Consequently, the dividend also looks appealing. The current dividend yield of 5.09% provides a nice income stream for investors who appreciate that sort of thing.

I believe that's where the bullish argument comes to an end. Sirius XM appears to be a dying business, or at least one that's on the wrong side of technological change. Popular streaming platforms are all the rage, and they provide a better customer value proposition.

And while the company generated 75% of its revenue in Q3 from subscriptions, the Sirius XM self-pay subscriber base has declined in eight of the last 11 quarters. Revenue also fell last quarter. That's definitely not an encouraging sign.

Lululemon is the best stock to buy today

Like Sirius XM, Lululemon shares also trade at a low valuation. The current forward P/E multiple of 13.6 is 38% cheaper than the overall S&P 500. And it's a clear indication of how much the market has soured on the athleisure pioneer.

Lululemon certainly hit a rough patch. Competition in this industry is always fierce, requiring the leadership team to constantly innovate with new products to drive customer excitement. CEO Calvin McDonald admitted that Lululemon hasn't been the best lately in this regard.

This hasn't helped things in the critical U.S. market. Sales here were flat in Q2 2025 (ended Aug. 3) compared to the year-ago period. Tariffs have created a headwind, increasing costs and pressuring profits.

However, Lululemon still possesses a strong brand in the industry, which supports its competitive position. Shoppers have come to know the business for its high-quality and premium merchandise. And this affords Lululemon some pricing power, as evidenced by its robust gross margin.

Once consumer confidence bounces back in the U.S., Lululemon should see demand pick up. Management hopes that a fresher product lineup can keep customers coming back.

In the meantime, the business can lean on China to drive growth. Revenue here jumped 25% year over year in the second quarter. And Lululemon is opening lots of stores in the country to capture what it believes is a meaningful opportunity.

Lululemon's profit trajectory is encouraging as well, which should have a direct impact on how the stock fares. Net income grew 180% between fiscal 2019 and fiscal 2024. While the near term could pose some challenges, Lululemon's bottom line could get back to solid gains in the future.

Between Sirius XM and Lululemon, the better stock to own over the next five years is clear. Investors should avoid the former and put their money in the latter. Lululemon is in a position to produce a much better result. But it will require a bit of patience for things to play out.

Neil Patel has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends Berkshire Hathaway and Lululemon Athletica Inc. The Motley Fool has a disclosure policy.