Hanesbrands Inc. (HBI), The Gap Inc. (GPS), Carter’s, Inc. (CRI): Are These Apparel Businesses Good Buys?

Maidenform Brands, Inc. (NYSE:MFB) may also gain more of a solid foundation to grow its business, taking advantage of Hanesbrands Inc. (NYSE:HBI)‘ own manufacturing facility rather than sourcing its products from third-party manufacturers.

Hanesbrands Inc. (NYSE:HBI) expects that Maidenform Brands, Inc. (NYSE:MFB) could add more than $500 million in sales, $0.60 a share to earnings and $65 million in free cash flow annually. At $575 million, Maidenform is valued at around 9.5 times its 2012 EBITDA. Interestingly, the acquisition valuation is much lower than Hanesbrands’ valuation.

Hanesbrands Inc. (NYSE:HBI) is trading at $64 per share, with the total market cap of around $6.3 billion. The market does not value Hanesbrands cheaply at 12.2 times its trailing EBITDA. The dividend yield comes in at around 1.3%.

My Foolish take

All of those three businesses could deliver decent long-term results for their shareholders. Although the companies are not valued cheaply, they don’t seem to be quite expensive either. With their global-leading positions in the apparel industry and growing operating performance, the three businesses could be solid long-term picks for investors.

Anh HOANG has no position in any stocks mentioned. The Motley Fool has no position in any of the stocks mentioned.

The article Are These Three Apparel Businesses Good Buys? originally appeared on Fool.com.

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