It has become harder and harder to find good investment ideas that trade at reasonable multiples, have some decent upside potential, and also pay dividends. One sector that was on fire for most of last year, has been beaten down hard recently despite a plethora of positives in the group. The financials are offering growth investors the best entry points in years, and could be a leading sector the rest of 2018.

Large cap banks have taken it on the chin recently, and look like great ideas for investors looking to stay in the game, but who may be ready to switch from crowded technology and momentum stocks. We screened the Merrill Lynch banking research universe, and found four top companies that are rated Buy, trade at reasonable forward multiples, and all pay dividends.

Citigroup

This top bank has traded down over 15% from highs posted in January. Citigroup Inc. (NYSE: C) has approximately 200 million customer accounts and does business in more than 160 countries and jurisdictions. Citi 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 still very cheap 9.25 times estimated 2019 earnings, this company look very reasonable in what is becoming a pricey stock market. A continuing stock buyback program at the bank is a positive.

Citigroup reported first quarter earnings and revenue that beat analyst expectations on the company’s results got a boost from lower corporate taxes and strong revenue from stock trading. While revenue from Citigroup’s fixed-income trading business fell 7% to $3.4 billion in the first quarter, but that was offset by a 38% hike in equity trading sales. Overall trading revenue grew by 3% in the first quarter to $5 billion.

Citigroup investors are paid a 1.87% dividend. The Merrill Lynch price target for the stock is $84. The Wall Street consensus price objective is posted at $83.90. Shares are trading early Monday at $68.82.

JPMorgan Chase

This stock trades at a very reasonable 11.3 times estimated 2019 earnings and could also respond good in a rising rate scenario. JPMorgan Chase & Co. (NYSE: JPM) is one of the leading global financial services firms and one of the largest banking institutions in the US, with about $2.6 trillion in assets. The company as it is today formed through the merger of retail bank Chase Manhattan and investment bank JP 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. Earnings were outstanding and the analysts remain very positive on the shares for the balance of 2018.

JPMorgan investors are paid a 2.02% dividend. The Merrill Lynch price objective is posted at $126. The Wall Street consensus price target is $122.07. The shares are trading higher this Monday morning at $111.48.

PNC Financial Services Group

This top regional bank trades at 12.7 times estimated 2019 earnings. The PNC Financial Services Group, Inc. (NYSE: PNC) is one of the United States’ largest diversified financial services organizations, and the 6th largest U.S. bank by deposits with $375 billion in assets.

PNC 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; wealth management and asset management. With consistent earnings growth, a very positive and growing loan portfolio, the company is a premiere super-regional bank stock to own.

PNC delivered another quarter of strong earnings. Net income was $1.2 billion for the first quarter compared with $2.1 billion for the fourth quarter, which included a net benefit of $.9 billion from federal tax legislation and significant items. Net interest income increased $16 million, or 1 percent, to $2.4 billion primarily due to higher loan yields offset by higher deposit and borrowing costs and the impact of two fewer days in the first quarter.

Shareholders are paid a 2.02% dividend. The Merrill Lynch price target is $168, and the Wall Street consensus is set higher at $161.63. PNC is trading at $148.97 in early Monday action.

Wells Fargo

This large cap bank is a solid value play for 2018, but still faces the possibility of large fines. Wells Fargo & Company (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 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 their 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 company trades at 10.85 times estimated 2019 earnings.

Wells Fargo shareholders are paid a decent 2.8% dividend. The Merrill Lynch price target is $67, and the consensus price target is at $60.80. Shares are up to $56 in early Monday morning trading.

Four top bank stocks to buy, none of which are trading anywhere close to the 52-week highs, and all pay solid and dependable dividends. In a pricey, and much more volatile market, they all make sense for growth accounts looking to add financials.

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