Big banks might suffer bad press today, such as the surprising resignation of Citigroup CEO Vikram Pandit or JPMorgan Chase's massive hedging loss, but over the long term, financial stocks are a good buy, said Tim Travis, CEO and founder of T&T Capital Management.

With interest rates low, many investors have opted for dividend-paying stocks in search of yield.

Many dividend buys in the United States have already been played out, but financial stocks haven't for the long-term investor.

"You want to look who is likely to be increasing dividends over the next couple of years, and that puts you squarely in the financials," Travis told Newsmax TV in an exclusive interview.

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"I think that stocks like Citigroup, Bank of America, Wells Fargo, these are companies that are going to be drastically increasing their dividends over the next couple of years, and I think you are getting a really great valuation and substantial dividend growth."

Citi recently grabbed headlines when its Pandit resigned a day after the firm released earnings that pleased Wall Street.

Vikram and the board of directors reportedly clashed over performance and strategy issues.

Still, the bank is a good long-term play, especially under the helm of Michael Corbat, who ran the Citi Holdings unit, which manages sour assets.

Editor's Note: Economist Warns: ‘Money From Heaven a Path to Hell.’ See Evidence.

Many Wall Street observers viewed Pandit as more of a hedge fund manager and less likely to run a massive financial corporation.

"I feel like the successor that they named is a very able person with more banking experience than Mr. Pandit, and I believe that the business of Citigroup is performing quite well, especially the core Citicorp, which is the profitable part of Citigroup," Travis said.

"There is Citi Holdings, which is being wound down, and I think that people are underestimating that as Citi Holdings winds down, Citicorp has really phenomenal earnings power. I think Citigroup as a stock could double within three to five years."

Thanks to low interest rates and other Federal Reserve stimulus measures, stock prices have risen as of late, meaning investors must be more discerning about picking equities and not expect a rising tide.

"I think the stock market is fairly valued," Travis said.

"There are pockets of opportunity, which means it's very important for you to be an individual stock picker as opposed to just investing in a broad-based index or a mutual fund in our estimation."

When picking a stock, think long term and be sure to understand the company and what it does, Travis advised.

When buying a stock, act as if you are buying the company. Is it something you would want to own and run?

"Don't buy anything that you wouldn't want to own the whole business at that price if you have the means to do so. The other thing is, you want to take a much longer-term approach," Travis said.

"You want to look three to five years out, ideally, because that allows you to ideally be an investor as opposed to just a speculator."

Editor's Note: Economist Warns: ‘Money From Heaven a Path to Hell.’ See Evidence.