After several years of lackluster performance, shares of Hanesbrands (NYSE:HBI) have started to move upward. The leading underwear and clothing basics company has had its struggles, but things are looking up.

A long history of offering the basics

Hanesbrands traces its founding back to 1901, but its life as a public company only began in 2006 when Hanes Brands was spun off from Sara Lee Corporation (which subsequently changed its name to Hillshire Brands and is now part of Tyson Foods). Free of the food business, the company was able to refocus on growing its clothing enterprise.

Things were tough out the gate. Hanes was burdened down with debt that its former parent Sara Lee gifted it upon the spinoff. Shortly after becoming independent was the financial crisis of 2008, which put pressure on the company's sales.

HBI Revenue (TTM) Chart

Data by YCharts.

But Hanesbrands is a compelling business model, selling clothing basics through household names like Hanes, Champion, and Playtex. Everyone needs underwear, socks, and other innerwear, and these things frequently wear out. That creates a stable and predictable source of revenue.

It's the type business model that Warren Buffett likes. In fact, he bought Hanesbrands rival Fruit of the Loom back in 2002 when that company was struggling under the burden of debt. Hanesbrands isn't without its own celebrity endorsement either -- basketball superstar Michael Jordan has been the face of the company for close to 30 years.

After spending several years getting debt paid down and recovering from the financial downturn, investors are just now starting to realize the benefits of that stable business model. Hanesbrands started paying a dividend in 2013 and has more than doubled the payout since its inception. The stock currently yields 2.6% as of this writing.

A man wearing a pair of Hanes "world's softest socks."

Image source: Hanes.

A unique business model providing growth

Hanesbrands' operating mantra is "sell more, spend less, generate cash." To the first point, how does a staples business like underwear achieve sales growth?

The company has been building out an e-commerce operation to capture consumer sales that have been moving in that direction. In 2016, 8% of U.S. sales were online compared with only 7% the prior year, and that figure jumped to 10% during the first quarter of this year. Management said it has been slowly increasing its market share as a result of leveraging its brands with the internet.

Cost control has also been a key area of development. The company has a distinct advantage in controlling costs compared to other apparel companies in that it owns most of its production factories around the world -- about 90% of them to be exact. Because it has direct control of those operations, management thinks it can shave off $150 million in expenses by 2019, which would represent a 10% reduction based on 2016 numbers.

Of that, $50 million is to be reinvested into brand growth -- especially Champion -- and other online selling initiatives. That frees up $100 million, the "generate cash" part of the company's plan. Acquisitions have been an important use of cash in recent years with the 2013 purchase of Maidenform women's wear for $583 million. Last year was the purchase of Pacific Brands, maker of Australia's top underwear brand, for $600 million.

Both of those purchases led to gains at the top and bottom line, and management said its "generate cash" initiative will likely support more acquisitions in the future.

HBI Revenue (TTM) Chart

Data by YCharts.

Hanesbrands is an old company but only has a limited track record for investors. However, it's paying a solid dividend, is generating an increasing amount of cash, and has an inherently stable business model. This company deserves some more attention from conservative and income-oriented investors.

This article represents the opinion of the writer, who may disagree with the “official” recommendation position of a Motley Fool premium advisory service. We’re motley! Questioning an investing thesis -- even one of our own -- helps us all think critically about investing and make decisions that help us become smarter, happier, and richer.