Under and over wear

There’s a lot to like about Hanesbrands (NYSE: HBI). For starters, it owns a portfolio of familiar brands, such as Hanes, Champion, Maidenform, Bali, Playtex, L’eggs and Wonderbra. It’s a top apparel brand in the U.S., and has the benefit of operating most of its own manufacturing facilities — unlike many of its rivals, which contract out for such work.

The company has been hurt by the pandemic, with many of its sales channels closed or ailing, though its mass-merchant channels such as Walmart and Target remained operational even during lockdown. Hanesbrands had already been struggling pre-pandemic with a soft innerwear market, and it carries significant debt (around $4 billion), far eclipsing its cash.

The news is not all bad, though, due in large part to its Champion activewear unit, which is performing well. In addition, Hanesbrands has a new business that’s specifically pandemic-related: It began making protective face masks and gowns for the federal government, delivering more than 450 million masks and 20 million medical gowns on time. It’s also making face masks for consumers, large organizations and business-to-business customers, and this new business doesn’t look like it’s going away anytime soon.

Hanesbrands stock may not double or triple in the near future, but it’s positioned to reward long-term investors over time. Its dividend, recently yielding 3.5%, is a bonus.