NEW YORK (TheStreet) -- Are large-cap bank stocks a good investment right now? The answer is an emphatic "yes."

Bank fundamentals are strong, largely due to the rising economy. Loan volumes and deposits are increasing and trading profits and investment banking fees are higher.  J.P. Morgan's (JPM - Get Report) earnings beat analysts' expectations, partly because of a pick-up in mergers, along with increased trading revenues. And although Wells Fargo's (WFC - Get Report) earnings were not as rosy, it saw "strong growth in deposits and primary checking customers," John Stumpf, the company's CEO, said in a statement

So what are the best large-cap banks investors should be buying? Here are the top three, according to TheStreet Ratings, TheStreet's proprietary ratings tool.

TheStreet Ratings projects a stock's total return potential over a 12-month period including both price appreciation and dividends. Based on 32 major data points, TheStreet Ratings uses a quantitative approach to rating over 4,300 stocks to predict return potential for the next year. The model is both objective, using elements such as volatility of past operating revenues, financial strength, and company cash flows, and subjective, including expected equities market returns, future interest rates, implied industry outlook and forecasted company earnings.

Buying an S&P 500 stock that TheStreet Ratings rated a "buy" yielded a 16.56% return in 2014 beating the S&P 500 Total Return Index by 304 basis points. Buying a Russell 2000 stock that TheStreet Ratings rated a "buy" yielded a 9.5% return in 2014, beating the Russell 2000 index, including dividends reinvested, by 460 basis points last year.

Check out which three large-cap banks made the list. And when you're done be sure to read about which big bank stocks to buy now. Year-to-date returns are based on April 15, 2015 closing prices.

USB ChartUSB data by YCharts
3. U.S. Bancorp (USB - Get Report)
Rating: Buy, A
Market Cap: $77.4 billion
Year-to-date return: -3.4%

U.S. Bancorp, a financial services holding company, provides a range of financial services in the United States.

"We rate U S BANCORP (USB) a BUY. This is based on the convergence of positive investment measures, which should help this stock outperform the majority of stocks that we rate. The company's strengths can be seen in multiple areas, such as its revenue growth, expanding profit margins, increase in net income, growth in earnings per share and increase in stock price during the past year. We feel these strengths outweigh the fact that the company shows weak operating cash flow."

Highlights from the analysis by TheStreet Ratings Team goes as follows:

  • USB's revenue growth has slightly outpaced the industry average of 1.6%. Since the same quarter one year prior, revenues slightly increased by 4.7%. This growth in revenue appears to have trickled down to the company's bottom line, improving the earnings per share.
  • The gross profit margin for U S BANCORP is currently very high, coming in at 88.19%. It has increased from the same quarter the previous year. Along with this, the net profit margin of 27.19% significantly outperformed against the industry average.
  • The net income growth from the same quarter one year ago has exceeded that of the S&P 500 and the Commercial Banks industry average. The net income increased by 2.2% when compared to the same quarter one year prior, going from $1,456.00 million to $1,488.00 million.
  • U S BANCORP's earnings per share improvement from the most recent quarter was slightly positive. The company has demonstrated a pattern of positive earnings per share growth over the past two years. We feel that this trend should continue. During the past fiscal year, U S BANCORP increased its bottom line by earning $3.08 versus $3.01 in the prior year. This year, the market expects an improvement in earnings ($3.26 versus $3.08).
  • In its most recent trading session, USB has closed at a price level that was not very different from its closing price of one year earlier. This is probably due to its weak earnings growth as well as other mixed factors. Turning our attention to the future direction of the stock, it goes without saying that even the best stocks can fall in an overall down market. However, in any other environment, this stock still has good upside potential despite the fact that it has already risen in the past year.
Must Read:  3 Mid-Cap Bank Stocks to Add to Your Portfolio Right Now


JPM ChartJPM data by YCharts
2. JPMorgan Chase & Co. (JPM - Get Report)
Rating: Buy, A
Market Cap: $239 billion
Year-to-date return: 2.6%

JPMorgan Chase & Co., a financial holding company, provides various financial services worldwide. The company operates through four segments: Consumer & Community Banking, Corporate & Investment Bank, Commercial Banking, and Asset Management.

"We rate JPMORGAN CHASE & CO (JPM) a BUY. This is based on the convergence of positive investment measures, which should help this stock outperform the majority of stocks that we rate. The company's strengths can be seen in multiple areas, such as its good cash flow from operations, expanding profit margins, notable return on equity and increase in stock price during the past year. Although the company may harbor some minor weaknesses, we feel they are unlikely to have a significant impact on results."

Highlights from the analysis by TheStreet Ratings Team goes as follows:

  • Net operating cash flow has significantly increased by 504.41% to $28,746.00 million when compared to the same quarter last year. In addition, JPMORGAN CHASE & CO has also vastly surpassed the industry average cash flow growth rate of 318.99%.
  • The gross profit margin for JPMORGAN CHASE & CO is currently very high, coming in at 88.82%. Regardless of JPM's high profit margin, it has managed to decrease from the same period last year. Despite the mixed results of the gross profit margin, JPM's net profit margin of 20.20% significantly outperformed against the industry.
  • The return on equity has improved slightly when compared to the same quarter one year prior. This can be construed as a modest strength in the organization. Compared to other companies in the Commercial Banks industry and the overall market on the basis of return on equity, JPMORGAN CHASE & CO has outperformed in comparison with the industry average, but has underperformed when compared to that of the S&P 500.
  • JPMORGAN CHASE & CO's earnings per share declined by 8.5% in the most recent quarter compared to the same quarter a year ago. This company has reported somewhat volatile earnings recently. But, we feel it is poised for EPS growth in the coming year. During the past fiscal year, JPMORGAN CHASE & CO increased its bottom line by earning $5.29 versus $4.32 in the prior year. This year, the market expects an improvement in earnings ($5.80 versus $5.29).
  • JPM, with its decline in revenue, slightly underperformed the industry average of 1.6%. Since the same quarter one year prior, revenues slightly dropped by 2.5%. Weakness in the company's revenue seems to have hurt the bottom line, decreasing earnings per share.
Must Read:  These 10 Stocks Were the Worst S&P 500 Performers Last Quarter


WFC ChartWFC data by YCharts
1. Wells Fargo & Company (WFC - Get Report)
Rating: Buy, A
Market Cap: $282.4 billion
Year-to-date return: -0.02 %

Wells Fargo & Company provides retail, commercial, and corporate banking services to individuals, businesses, and institutions.

"We rate WELLS FARGO & CO (WFC) a BUY. This is based on the convergence of positive investment measures, which should help this stock outperform the majority of stocks that we rate. The company's strengths can be seen in multiple areas, such as its revenue growth, increase in stock price during the past year, increase in net income, growth in earnings per share and expanding profit margins. We feel these strengths outweigh the fact that the company shows weak operating cash flow."

Highlights from the analysis by TheStreet Ratings Team goes as follows:

  • WFC's revenue growth has slightly outpaced the industry average of 1.6%. Since the same quarter one year prior, revenues slightly increased by 3.4%. This growth in revenue appears to have trickled down to the company's bottom line, improving the earnings per share.
  • The stock has risen over the past year as investors have generally rewarded the company for its earnings growth and other positive factors like the ones we have cited in this report. Turning our attention to the future direction of the stock, it goes without saying that even the best stocks can fall in an overall down market. However, in any other environment, this stock still has good upside potential despite the fact that it has already risen in the past year.
  • The net income growth from the same quarter one year ago has exceeded that of the S&P 500 and the Commercial Banks industry average. The net income increased by 1.8% when compared to the same quarter one year prior, going from $5,610.00 million to $5,709.00 million.
  • WELLS FARGO & CO's earnings per share improvement from the most recent quarter was slightly positive. The company has demonstrated a pattern of positive earnings per share growth over the past two years. We feel that this trend should continue. During the past fiscal year, WELLS FARGO & CO increased its bottom line by earning $4.10 versus $3.89 in the prior year. This year, the market expects an improvement in earnings ($4.15 versus $4.10).
  • The gross profit margin for WELLS FARGO & CO is currently very high, coming in at 93.37%. Regardless of WFC's high profit margin, it has managed to decrease from the same period last year. Despite the mixed results of the gross profit margin, WFC's net profit margin of 25.43% significantly outperformed against the industry.
Must Read:  These 10 Financial Services Stocks Were the Best S&P 500 Performers Last Quarter