Is Hanesbrands Inc. Dividend Sustainable?

Paying a yield of 2.6%, investors seeking dividend stocks may find Hanesbrands (NYSE: HBI) an attractive option. The clothing company owns multiple brands including its namesake Hanes, Playtex, and Jockey. The company has increased its payout every year since 2013 and its most recent payout increased more than 36% over the prior year.

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A consistently growing dividend is a strong signal of business strength but investors should be wary if yields begin to creep up. At first glance, Hanes's dividend yield of 2.6% does not appear to be a concern. It's not much higher than the S&P 500 yield of 1.9%. However, the yield has increased 43% over the past year and although this is generally positive, the reasoning behind the increase can be a red flag.

Source: Fool.com