It seems hard to believe, but since the highs that were posted last summer, the bank stocks as a whole are down a stunning 20%, which is more than two times the loss that the S&P 500 put in. The question for investors looking at the group is whether this is a bottom or they have farther to fall. With worries about a slowing economy, harsh election year political rhetoric and weakening capital markets, some are still steering clear.

A new Deutsche Bank research report touches on all the above-mentioned concerns and numerous others, not the least of which is the fallout from bad energy loans, which could be around for years. However, the firm does have bank stocks in its research universe that are rated Buy. We found four that look very attractive now.

Bank of America

This company has continued a methodical march back to financial health and is a true big money center bank to make the list at Deutsche Bank. Bank of America Corp. (NYSE: BAC) is the fifth largest bank in the world by market capitalization, and it is a ubiquitous presence in the United States. The Merrill Lynch brokerage arm has continued to supply the bank with outstanding revenues and growth.

The company provides various banking and financial products and services for individual consumers, small and middle market businesses, institutional investors, corporations and governments in the United States and internationally. Operating 5,100 banking centers, 16,300 ATMs, call centers, online and mobile banking platforms, the company continues to open new markets and expand share, which Jefferies feels it excels in.

CEO Brian Moynihan has met numerous times over the past year with Wall Street and many analysts came away feeling good about the overall outlook for the bank. With the potential for strong commercial lending and credit card originations, and trading at 9.4 times 2016 estimated earnings, the stock makes good sense now. Deutsche Bank cites the bank’s good expense management, loan growth and the valuation as positives.

Bank of America investors receive a 1.48% dividend. The Deutsche Bank price target for the stock is $17, and the Thomson/First Call consensus target is $17.45 The stock closed on Friday at $13.54.

JPMorgan Chase

This stock trades at a very low 10.5 times estimated 2016 estimated earnings. JPMorgan Chase & Co. (NYSE: JPM) is also expected to benefit from commercial loan growth and an upturn in capital spending. Wall Street analysts agree that the stock seems attractively valued on estimated price-to-earnings (P/E) and a very solid price-to-book value. Some on Wall Street have cautioned that last year’s divestiture of the physical commodities business could provide an earnings headwind throughout this year.

Improvement in loan growth, terrific equity capital markets and a steady increase in deposits are a solid plus. Trading at a discount to many of the large cap banks on 2015 earnings estimates helps upside potential as well. With $2.6 trillion in assets on a worldwide basis, and one of Wall Street’s savviest leaders in Jamie Dimon, the stock is a solid buy for investors. Dimon also recently put his money where his mouth was and reportedly bought a stunning 500,000 shares for a massive $26 million. It brings his total holdings in the bank to 6.7 million shares, worth over $360 million.

JPMorgan investors receive a 2.93% dividend. The Deutsche Bank has a $70 price target. The consensus target is $70.07, and shares closed on Friday at $60.05.
PNC Financial Services

This top regional bank was down almost 20% in the first six weeks of 2016 but has rebounded smartly. PNC Financial Services Group Inc. (NYSE: PNC) is one of the country’s largest diversified financial services organizations. It provides retail and business banking; residential mortgage banking; specialized services for corporations and government entities, including corporate banking, real estate finance and asset-based lending; and wealth management and asset management. With consistent earnings growth and a very positive and growing loan portfolio, the company is a premiere super-regional bank stock to own.

Wall Street analysts point to numerous positives, including the bank implementing huge cost savings plans. The bank is working on up to $100 million of new savings announced last year, and it is also applauded for outstanding credit/risk management and the limited exposure to the capital markets related areas, while focusing on traditional banking.

Top analysts also cite the bank’s impressive Basel III common equity tier 1 ratio of 10.0% for the fourth quarter of 2015, which well exceeds the 8.5% level that they feel PNC needs to run a conservative but very profitable bank.

Shareholders receive a 2.43% dividend. The Deutsche Bank price target is $99, while the consensus target is $97.10. Shares closed Friday at $87.30.

Wells Fargo

This is another stock for investors to look at now for safety and dividends with solid upside potential. Wells Fargo & Co. (NYSE: WFC) is a nationwide, diversified, community-based financial services company with $1.8 trillion in assets. The company provides banking, insurance, investments, mortgage and consumer and commercial finance through 8,700 locations, 12,800 ATMs, the Internet and mobile banking, and it has offices in 36 countries to support customers who conduct business in the global economy. Wells Fargo serves one in three households in the United States.

Wells Fargo has slowly, but surely, become one of the biggest mortgage lending companies in the United States, in addition to its normal banking and brokerage businesses. A continued increase in commercial real estate lending could really boost the bank’s bottom line and overall revenue. The stock also remains a top Warren Buffett holding.

Wall Street likes the stability, yield and some asset sensitivity that the big bank offers, and investors looking to add financials to their portfolio could do well buying shares. Wells Fargo has little exposure outside of the United States, and 2016 could end up being a transitional year with slower earnings growth and expenses running higher due to the GE acquisitions and tech and cyber upgrades. Analysts like the shareholder-driven management team and the coast-to-coast franchise exposure the bank provides.

Wells Fargo shareholders receive a 3.0% dividend. The $59 Deutsche Bank price target compares to the consensus target of $57.02. Shares closed Friday at $50.11.

These top bank stocks provide very solid total return potential. More conservative accounts looking to add new positions would be well served buying any of these for the rest of 2016 and beyond.

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