The conventional wisdom on Wall Street, if there truly is such a thing, is that rising rates are bad for stocks and can put a damper on the overall market. The fact of the matter is that rates have been too low for too long, and when the Federal Reserve finally raises rates again come December, it could be a positive for the bank stocks, as an increase in rates can actually help the bottom line.

We screened the Merrill Lynch research universe for banks stocks that not only are rated Buy, but also pay solid dividends. As we have maintained for some time, even though the Fed will raise rates in December, and most likely twice in 2017 and 2018, the increases will be very small and, while helping the big banks, they most likely won’t hurt the sluggish economy.

It should be noted three of the four banks will be reporting earnings on Friday, and this is not meant to suggest buying the stocks in front of earnings. These are recommendations for long-term accounts, and the focus is more on how rising rates can be helpful to overall earnings.

Citigroup

This top bank stock is still down over 15% from highs that were posted last summer, and the company also posted very solid second-quarter results. Citigroup Inc. (NYSE: C) has approximately 200 million customer accounts and does business in more than 160 countries and jurisdictions. It provides consumers, corporations, governments and institutions with a broad range of financial products and services, including consumer banking and credit, corporate and investment banking, securities brokerage, transaction services and wealth management.

Trading at a very cheap 9.5 times estimated 2016 earnings, this stock looks very reasonable in what is becoming a pricey stock market. A continuing stock buyback program at the bank is a positive. The company’s institutional clients group appeared to be holding its ground last quarter. Citigroup will report third-quarter earnings on Friday, and the market is generally positive over the anticipated results.

Citigroup investors receive a 1.31% dividend. The Merrill Lynch price target for the stock is $55. The Wall Street consensus price objective is $54.09. Shares closed most recently at $48.70.

JPMorgan

This stock trades at a very low 10.8 times estimated 2017 forward earnings and could respond well in a rising rate scenario. JPMorgan Chase & Co. (NYSE: JPM) is expected to continue 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 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 earnings headwind throughout this year.

Improvement in loan growth, terrific equity capital markets and a steady increase in deposits will be a solid plus. Trading at a discount to many of the large cap banks on 2016 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.

Earlier this year, Dimon put his money where his mouth was and reportedly bought a stunning 500,000 shares of the stock for a massive $26 million. That brought his total holdings in the bank to 6.7 million shares, worth over $360 million.

JPMorgan investors receive a 2.8% dividend. The $74 Merrill Lynch price target compares with the consensus target of $71.13. The shares closed Wednesday at $68.13.

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%, which well exceeds the 8.5% level that they feel the company needs to run a conservative but very profitable bank.

PNC shareholders receive a 2.43% dividend. Merrill Lynch has a $98 price target. The consensus target is posted at $92.78. Shares closed Wednesday at $90.38.

Wells Fargo

This large cap bank is another stock for investors to look at now for safety, dividends and 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. It also 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, and he raised his holdings in the bank to 10% on the stock’s weakness earlier this year.

The company reported inline results and earnings revisions, which didn’t go over well after the other major banks posted big earnings. Wells Fargo also had a recent public relations headache as it was revealed that employees allegedly opened up client accounts that were not approved. Things got worse recently as its CEO was absolutely eviscerated at a congressional hearing by politicians in an election year, and he has resigned under pressure. The dip in the stock due to the bad publicity could be a solid purchase level for long-term investors.

Wells Fargo shareholders are paid a 3.35% dividend. The Merrill Lynch price target is $48. The consensus target is at $50.21. Shares closed Wednesday at $45.32.

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The banks as a whole have underperformed this year as compared to other sectors. With that in mind, they may hold more overall value in a pricey market. The combination of steady rate increases and an improving economy could bode well for all of them.

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