Dow Jones, S&P 500 finish Thursday with slight gains >>> READ MORE

10 Safe Dividend Stocks to Own During the Next Market Crash

The keys to protection? Fair price, high quality and dividend growth.

      View All  

Safe Dividend Stocks for the Next Market Crash: Hanesbrands (HBI)

HBI Dividend Yield: 3%
3-year Annual Dividend Growth Rate: 44.2%

Famous underwear retailer Hanesbrands Inc. (NYSE:HBI) has fallen victim to the market’s hatred of the retail industry, which has sent shares down about 30% in the past year. However, Hanes has continued to show solid top- and bottom-line growth, with sales up 5% in 2016, and EPS soaring 32%.

And like a few other dividend stocks in the retail sector, Hanesbrands’ difficulties have plumped up the yield.

Thanks to a successful history of acquisitions, as well as supply chain optimization (economies of scale) from its 52 global, low-cost factories, Hanes has been able to grow its earnings and free cash flow per share by 15.8% and 45%, respectively, on an annual basis over the last five years.

Better yet, the company is doing well growing its online sales business, making its distribution network far more agnostic (i.e., Amazon-proof) than many other retailers.

Meanwhile, continued strong growth in its sportswear lines — which make up 50% of its sales — should allow the company to generate around 3% organic sales growth, driving operating income growth of 6% and EPS growth of 7% to 8%, courtesy of steady buybacks.

And with a very low payout ratio (32% of FCF over the past year), HBI should be able to reward dividend lovers with ongoing long-term payout increases of 9% to 10%. That doesn’t account for any potential faster growth through acquisitions that the company may make over the years either.

Next Page


Article printed from InvestorPlace Media, http://investorplace.com/2017/03/10-safe-dividend-stocks-next-market-crash/.

©2017 InvestorPlace Media, LLC