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Interest rates are slowly going up. That's the good news. Should you be buying financial stocks?

The Federal Reserve raised interest rates by 25 basis points last month and there could be more increases, possibly later this year.

Of all the banks out there, the one to buy is JPMorgan Chase (JPM) . Here's why.

Rising interest rates, which earn banks more revenue from loans and mortgages isn't enough. Execution is important. JPMorgan, which reports fourth-quarter earnings Thursday before the opening bell, stands out in a field of other banks.


JPM PE Ratio (TTM) data by YCharts

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JPMorgan stock gained 5% during 2015 although recent market volatility -- has pushed it down about 11% so far this year. But even as low interest rates pressured its revenue and profits, the bank continued to make money. By offsetting weak mortgage originations loans with reductions in non-interest expenses, JPMorgan is poised to deliver higher earnings for the fiscal year ending in December.

At around $59 per share and trading at a price to earnings multiple of 10 against a P/E of 21 for the S&P 500 undefined , JPM stock is easily the most discounted name among its "too big to fail" peers Citigroup  (C) , Wells Fargo  (WFC) and Bank of America  (BAC) . JPMorgan is now trading some 16.5% below its 52-week high of $70.61, so the risk-reward ratio has turned positive and the company pays a 44-cent quarterly dividend that yields 2.68% annually, higher than the 2% yield paid by the average stock in the S&P 500 index.

The bank has a consensus buy rating and a high-analyst 12-month price target of $79, implying potentially 34% stock gains.

Jim Cramer's Action Alerts PLUS owns Wells Fargo and Bank of America in its portfolio.

For the quarter that ended December, the average analyst earnings-per-share estimate for JPMorgan is $1.31 a share on revenue of $23.15 billion compared to the year-ago quarter when the bank earned $1.19 a share on revenue of $23.55 billion. For the full year, earnings are projected to climb 12% to $5.93 a share, while revenue of $95.15 billion would mark a 3% decline from the year-ago quarter.

Also, JPMorgan maintains its commitment to return cash to shareholders with plans to take more than $6 billion worth of its shares off the market via stock buybacks in 2016. In short, combined with its strong dividend, share repurchase program and solid execution, investors can bank on JPMorgan for the long term in 2016.

This article is commentary by an independent contributor. At the time of publication, the author held no positions in the stocks mentioned.