A hyphen is one-half the size of an en-dash (–) and one-third the size of an em-dash (—). Hyphens have three main uses.
1. Hyphens are used primarily to make compound words, especially phrasal adjectives preceding the nouns they modify—for example:
Thou fair-haired angel of the evening . . . [William Blake]
Talking in a sing-song drone . . . [Entertainment Weekly]
. . . a starch-filled potluck of goodness. [Two Vegan Boys]
An adjective phrase beginning with an -ly adverb needs no hyphen—for example:
. . . that I had realized the goal of her poorly conceived plan. [Wayward Irregular]
So the hyphen here is unnecessary:
Such advertisements are categorized by sparsely-dressed women . . . [Daily Campus]
2. Hyphens help distinguish between homographs with vastly different meanings—for example, co-op and coop, re-create and recreate, mid-section and midsection.
3. Hyphens are occasionally used in compound nouns, although usage varies, and specific conventions govern each case. Invented compound nouns are usually good candidates for hyphenation; poets often do this with whimsical coinages—for instance:
And the flags where the butter-bump hides in for ever . . . [John Clare]