2017-04-20 / The Motley Fool

The Motley Fool Take

Brands You Know

Just about every consumer has purchased something from Hanesbrands (NYSE: HBI), with its well-established brands that include Hanes, Champion, Maidenform, DIM, Bali, Playtex, Bonds, JMS/Just My Size, Nur Die/Nur Der, L’eggs, Lovable, Wonderbra, Berlei and Gear for Sports. The stock has sunk more than 20 percent over the past year, presenting a buying opportunity.

Hanesbrands is feeling the effects of the weak retail environment that persists despite an otherwise improving economy. A lot of business has moved online, and Hanesbrands’ own e-commerce business now accounts for 11 percent of total sales, up from 8 percent a year ago. The company has also recently exited from its catalog business as it focuses on its most promising operations.

Hanesbrands’ competitive advantages include strong brands, great presence in retail outlets, economies of scale, and a large-scale supply chain that’s hard for competitors to duplicate. With 52 facilities across the globe, it can produce its goods at a lower cost.

Another plus for Hanesbrands investors is its dividend, which recently yielded 3 percent. The payout has been growing briskly, rising by 36 percent early this year, and tripling since Hanesbrands established the dividend in 2013.

Spun off from Sara Lee in 2006, Hanesbrands has been growing in part by acquisitions. It has been working on growing its already significant market share, and its future looks promising. ¦

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