The wait is over for Wall Street and for the legions of investors ready for the second-quarter earnings tsunami to begin. As has been the case for some time, the large-cap financials will lead off the high-profile earnings parade. This year may be one of the best opportunities for growth stock investors to buy some of the top stocks in the sector before they report later this week.

One reason the large-cap financials look like solid ideas now is that compared to many of the other sectors, the top stocks here do not trade at huge multiples. In a stock market that is very overbought, and quite possibly due for a correction between now and Labor Day, these dividend-paying giants could very well offer the best total return potential for the rest of 2021, and perhaps beyond.

We screened our 24/7 Wall St. research database looking for the companies in the financial sector that are Buy rated and paid the biggest dividends. We found four top stocks that investors looking for solid growth potential, a degree of safety and reliable dividends should consider buying in front of the earnings prints later this week.

It is important to remember that no single analyst report should be used as a sole basis for any buying or selling decision.

Bank of America

The company posted solid first-quarter results and looks poised to do the same again. Bank of America Corp. (NYSE: BAC) is a ubiquitous presence in the United States, providing 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. It operates 5,100 banking centers, 16,300 ATMs, call centers and online and mobile banking platforms.

The bank has expanded into a number of new U.S. markets, with scale across the country positioning it ideally to benefit from accelerating loan growth over the next two years. Moreover, unlike smaller peers, scale allows the bank to increase investment substantially over the next few years without notably jeopardizing returns, driving further market share gains.

Bank of America stock investors receive a 2.11% dividend. Credit Suisse has a $46 price target on the shares, while the consensus target is $43.67. Friday’s closing print was $40.04. The bank is expected to report earnings on Wednesday, July 14.

Citigroup

This top bank stock backed up some recently and is offering an outstanding entry point. Citigroup Inc. (NYSE: C) is a leading global diversified financial service company that provides consumers, corporations, governments a broad range of financial products and services.

Citigroup offers services such as consumer banking and credit, corporate and investment banking, securities brokerage, transaction services and wealth management. It operates and does business in more than 160 countries and jurisdictions in North America, Latin America, Asia and elsewhere.

Trading at a still very cheap 7.6 times estimated 2021 earnings, this stock looks very reasonable in what remains a volatile stock market and in a sector that has lagged dramatically.

Investors receive a 3.00% dividend. The BofA Securities price target is a massive $100, and the consensus target is $84.76. Citigroup stock closed on Friday at $68.45 a share. The company also is slated to report on Wednesday, the 14th.

This stock trades at a still reasonable 11.8 times estimated 2021 earnings. JPMorgan Chase & Co. (NYSE: JPM) is one of the leading global financial services firms and one of the largest banking institutions in the United States, with about $2.6 trillion in assets. The company as it is today was formed through the merger of retail bank Chase Manhattan and investment bank J.P. Morgan.

The firm has many operating divisions, including investment and corporate banking, asset management, retail financial services, commercial banking, credit cards and financial transaction services.

Top analysts across Wall Street are very positive on the money center and investment giant and feel that this industry titan faces a broad recovery in nearly every aspect of its business:

1. Leading M&A advisory and capital markets product set and market share
2. Massive footprint of corporate and commercial banking customers
3. Sizable wholesale payments businesses

The company has proven that it has the wherewithal to invest continually in people, products and platforms to further its market share base, extending its competitive advantage compared with most of its peers.

The dividend yield is 2.35%. The $200 Wells Fargo price target is well above the $167.23 consensus target. JPMorgan stock closed at $155.77 on Friday. Look for its report on Tuesday, the 13th.

Morgan Stanley

This is one of Wall Street’s white-glove firms, and it may be among the best buys among the banking and investment stocks. Morgan Stanley (NYSE: MS) is a global investment bank with leading positions in investment banking (M&A and equity underwriting), equity trading and wealth management, which contributes nearly 50% of firmwide revenues. The firm also has an asset management business, which adds to the lower-risk business profile the firm has pursued since the financial crisis.

Last year, this Wall Street investment bank agreed on a $13 billion purchase of discount brokerage E-Trade. With 5.2 million customers, it was once a revolutionary platform that “helped usher in a dramatic shift among financial services firms” and fueled the rise of indexes and exchange-traded funds, making investing vastly easier for do-it-yourself investors.

Investors receive a 3.10% dividend. Jefferies has set a $108 price target. The consensus target is $98.62, and Morgan Stanley stock closed most recently at $90.33. The company reports on Thursday, July 15.

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It is always a bit riskier to buy shares in front of the numbers, and very conservative investors may want to either wait for the results or buy smaller, partial positions. With some solid tailwinds for the rest of the year, not the least of which could be rising interest rates and a continued reopening of the economy, all these stocks make sense for growth investors with a longer timeframe.

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