3 Big-Brand Stocks to Buy in February

By Steve Symington, Anders Bylund, and Demitrios Kalogeropoulos Markets Fool.com

One of the most important aspects of any business is the strength of its brands. And in today's fast-changing world, it's increasingly difficult for companies to successfully build and maintain thriving brands that continue resonating with consumers.

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We asked three top Motley Fool contributors each to choose a big-brand stock that they believe investors would be wise to purchase this month. Read on to see why they picked Nike (NYSE: NKE), Yum! Brands (NYSE: YUM), and Intel (NASDAQ: INTC).

Nike's new Air Jordan I golf shoe. IMAGE SOURCE: NIKE

Sprinting your way to investing success

Demitri Kalogeropoulos(Nike):Nike, the Dow's worst performer last year, has underperformed the market by a wide margin since last February. Sure, the athletic-apparel titan is going through major challenges right now, including slowing growth and spiking competition in the U.S. Profitability has been trending lower, too, dropping by 1.4 percentage points last quarter, to 44% of sales.

But the profit pain of the last few quarters has left Nike in a stronger inventory position that should help it speed up sales gains and earnings growth. It has a packed product portfolio with brands including Jordan, the Air VaporMax, which will likely push its expansion pace higher over the next six months, even as average prices rise.

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Meanwhile, investors don't have to fear the type of brutal demand slowdown that rocked rivalUnder Armour(NYSE: UA)(NYSE: UAA)recently, given that Nike is far less reliant on the weakening North American market. Western Europe and China, for example, just logged their 13th- and 10th-straight quarters, respectively, of double-digit revenue growth.

The battle for market share in the U.S. could ding profits for both Nike and Under Armour in the short term. Yet Nike has strong advantages on its side, including a broader product line, entrenched sports partnerships, and a dominant marketing budget. These strengths all imply it can withstand any industry slump better than its peers. Meanwhile, investors have a chance to snap up one of the top branded-businesses in the world following a rare double-digit price decline in 2016.

IMAGE SOURCE: Yum! Brands.

Mouthwatering shareholder value creation

Steve Symington(Yum! Brands):Shares of Yum! Brands are up around 13% since late October, when the parent company of Taco Bell, Pizza Hut, and KFC completed its planned spinoff of Yum China. But considering the progress Yum! Brands demonstrated in its solid fourth-quarter report last week, I think now is a great time for investors to open, or add, to their positions in the fast-food juggernaut.

Fourth-quarter revenue climbed a modest 2.4% year over year, to just over $2 billion, asa 2% decline in comps at Pizza Hut was more than offset by same-store sales growth of 3% at both Taco Bell and KFC -- and this despite what both Yum! and other fast-food specialists describe as exceedingly difficult industry conditions in the United States. Core operating profit simultaneously grew 27% for the quarter, and adjusted earnings per share rose 19%, to $0.79.

Perhaps most important, Yum! Brands continued to move forward with its vision for growing its unit base, driving higher traffic, and maximizing profits over the long term. To that end, Yum! Brands refranchised 232 restaurants last quarter alone for proceeds of $200 million. That brought its franchise ownership mix to 93%, up from 77% last October, and a solid step toward its goal of being 98% franchised by the end of fiscal 2018.

In addition to plans for optimizing its capital structure in the coming years, Yum! also aims to reduce annual capital expenditures by 80%, to $100 million, and lower general and administrative expenses by $300 million by the end of fiscal 2019. At the quarter's end, Yum! also had $1.9 billion remaining of the $2 billion repurchase plan its board authorized in mid-November.

In the end, for investors who are willing to buy now and watch the company continue to realize its vision for maximizing shareholder value, I think Yum! Brands stock still represents a compelling portfolio candidate.

An Intel-powered drone. IMAGE SOURCE: Intel.

Intel: Modest valuation doesn't match the top-shelf business

Anders Bylund(Intel): Intel (NASDAQ: INTC) is a chronically undervalued market leader.The largest semiconductor maker is trading below 15 times trailing earnings and 17 times free cash flows right now. That's cheap compared to the average valuation of the S&P 500 (average P/E ratio: 24), or the Dow Industrials (P/E: 20).

This valuation gap is only growing larger at the start of 2017. So far this year, Intel shares have trailed the S&P 500 by about 6 percentage points, the index moving up while Intel investors have taken a small haircut.

All of this might be fair shakes if Intel had done something to deserve a quick haircut. But that's not what's happening here.

The fourth-quarter report at the end of January was of the beat-and-raise variety. The presumably dying PC market showed new signs of life and accounted for 62% of Intel's operating profits. Meanwhile, the company is investing billions in its push into the Internet of Things, including the just-announced $7 billion restart of the dormant Fab 42 manufacturing facility in Arizona.

Intel is a proven winner in several markets that aren't going away anytime soon, actively exploring promising growth opportunities, and doing it all with unmatched resources and technical sophistication. And right now, the stock is on sale.

So what are you waiting for?

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Anders Bylund owns shares of Intel. Demitrios Kalogeropoulos owns shares of Nike and Under Armour (C Shares). Steve Symington owns shares of Under Armour (C Shares). The Motley Fool owns shares of and recommends Nike, Under Armour (A Shares), and Under Armour (C Shares). The Motley Fool recommends Intel. The Motley Fool has a disclosure policy.