The markets appear to be stabilizing and the investing world is getting its arms around the magnitude of the credit issues. But, invariably what happens in tough times is the good come down with the bad. Several pure mortgage players have been eviscerated in the mortgage debacle as subprime and otherwise suspect loans have come back to roost. However, do not lump Bank of America (NYSE: BAC), Wells Fargo (NYSE: WFC), and US Bancorp (NYSE: USB) into this category.

These three domestic banks have given very solid results for investors for both the March and the June quarters. Yes, they did take their reserves for bad loans to higher levels, but it did not cost them a quarterly miss or forward guidance reduction. The diversification of their earnings and revenue streams are just too powerful to be affected by the mortgage issues. Also, these three banks did not play in the riskier portion of the mortgage markets.

These banks however do stand ready to pick up market share of the mortgage market when the dust settles.

As the market absorbs the Fed's recent interest rate cut, investors will look to lock in yields. These big three pay superb dividends and have a terrific history of raising those dividends. USB yields 5.1%, Bank of America also pays 5.1%, and Wells Fargo pays 3.5%. All three sell at a discount to the S&P 500 current 2007 price earnings ratio of 15.5 times. They also have aggressive share buyback programs in place.

Normally I recommend bank stocks for superb yields and moderate growth. In this environment, these three stocks will offer great yields but also superb growth prospects. I can see price appreciation of 50% over the next two years for these three major players. The risk/reward profile is compelling and all three are strong buys.

Georges Yared is the CIO of Yared Investment Research and the author of Stop Losing Money Today.

This summer has been brutal for The Bear Stearns Companies, Inc. (NYSE: BSC), which has seen its stock value decline by 20% since early July. Things seemed to culminate this past weekend with the resignation of co-president Warren Spector, whom many viewed as a potential CEO when James Cayne eventually steps down.

The stock had lost 6% on Friday alone, but it seems the Spector resignation encouraged investors, who sent the stock up 5% on Monday. This may have been part of the general market resurgence on Monday, but I think it also speaks to the Street's sense that Bear Stearns is likely to come back.

I agree with the Street. While the company is certainly suffering from its exposure to the subprime market, BSC is simply too good a company to go away, and to my mind, its current woes only give investors a chance to get the stock at a discount.

It may take some time -- a recent report from Goldman Sachs (NYSE: GS) lowered its earnings estimates 15% over the next three years, and predicted the company would take some time to get back to ROE of 11%, which is the low end of its ROE over the past few years (ROE has averaged 15% since 2002). The company is deeply involved in the mortgage market and isn't as diversified as many other banks, and the housing market shows no signs of recovery anytime soon. But there will always be money to be made in the mortgage market, if not in subprimes, and Bear Stearns knows this market as well as anyone.

But even if it takes time, I think there's little question BSC will get there. It's the seventh-largest investment bank
in the U.S., and the company has long been known for its solid management. The company has moved toward a less risky approach of focusing on client services more than making its own investments -- this may lower its upside, but it also lowers risk, which may be especially important if the market suffers any prolonged setbacks.

Apart from its subprime division, (which it needs to deal with) BSC's financial condition is excellent, with no liquidity problems, and it has been enjoying particularly strong growth in its international revenues, which could also provide a cushion against slowing markets in the U.S.

Goldman gave a 12-month price target of $135; this was lowered from its previous price target of $180, but it's nearly 20% higher than the stock is trading now. You may need to be patient with this company, but it will pay off.

Type of Stock: One of the largest investment banks in the U.S., which has suffered a short-term setback from its subprime woes.

Price Target: Now trading at $117, BSC is way off its 52-week high of $172. I think if you can buy this now, you'll find yourself making money on it before a year is up. If you see it drop, don't panic; you might even want to buy more, because BSC simply isn't going to fade.

Hilary Kramer is a financial editor and money coach for AOL and an authority on investing. Visit her at www.hilarykramer.com.