I added a new position to my portfolio with the purchase of Hanesbrands Inc. (HBI)
61 shares @ $20.42 on 12/1/2017.
This increases my forward 12-month dividend income by $36.60 to a total of $4,577.42
I also updated my portfolio page to reflect the change.
I do not know about you, but as I am writing this post, I am wearing Hanes sock, Hanes Underwear, and Hanes undershirt. I have been wearing Hanes product since I was a little teenager, and I will continue to wear Hanes product because I think they make the best and affordable underwear product out there. My girlfriend knows my favorite and most used outfit. It is a white or black Hanes shirt with a pair of dark blue jeans. I feel so comfortable and myself wearing that outfit.
Now let’s talk about Hanes the company. HBI has been on a downtrend since mid-2014; however, earning has continued to rise. Currently, CFRA is predicting a 3-year growth rate of 16%. I think this is high, but I do predict a low double-digit growth rate in the next 3-years for Hanes.
Hanes has a short dividend growth history of only 4 years, however, they are expected to announce another increase sometime at the end of January 2018. The last dividend increase was in January of this year. HBI increased their dividend by a whopping 36.4%. I don’t expect that kind of increase this time around, but I do expect something in the double-digits. I was able to get some shares that are putting out a dividend yield of 2.94% which I think is great for this market.
Currently, HBI has a dividend payout ratio of only 35%. There is plantly of room for double-digit dividend growth to continue. Considering that earnings are predicted to increase at the double-digit rate as well, I see no reasons why management won’t increase it at a high rate.
HBI currently has a PE ratio of 13.1 with a forward PE of 10.0. This is undervalued territory considering that HBI has a PE 5-year average of 22.9.
HBI is undervalued, and I recommend it a BUY at this time. I have a fair price of $28.88 which means that HBI is 29.3% undervalued.
What do you think of HBI? Plan on buying? or why not?
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