Western Union (WU -1.11%), Midland States Bancorp (MSBI -0.12%) and Gilead Sciences (GILD -1.29%) are dividends stocks that hit the sweet spot with trailing price-to-earnings (P/E) ratios below 12, dividend yields above 4%, safe cash dividend payout ratios that are below 55% and a history of raising their dividends by double digits over the past five years. There's inexpensive, and then there's an inexpensive bargain, and I believe these three are in the latter category.

Bear in mind, none of the three companies have shown explosive revenue growth of late. However, what they do have is steady cash from operations and increased revenues this past year.

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Western Union is more than you may think it is

Western Union, whose shares are down nearly 23% this year, is often overlooked these days, considering that its financials have been on the upswing. That's what makes it a bargain for dividend investors. The company has raised dividends by nearly 47% over the past five years, and this year, it raised its dividend 4% to $0.235, which brings the dividend yield to nearly 5.6%.

The company has a low P/E of 8.6, compared to the average trailing twelve months (TTM) P/E of nearly 22 for the non-banking financial services industry. Western Union reported third-quarter revenue of $1.3 billion, an increase of 2% year over year, and its revenue growth was led by digital money transfers, which, the company said, had 38% growth in 2020 and have seen double-digit revenue growth in the first three quarters this year. The company's third-quarter earnings per share was $0.57 compared to $0.55 in the same period a year ago.

A big reason to keep an eye on Western Union is the growth of migrant populations across the world, which fits into the company's demographic of people who need to transfer money across borders to other individuals and either don't have a bank account or don't want to go through traditional banking channels. While people have been flocking to PayPal or other means to transfer funds, Western Union is catching up as it has made it easier to transfer funds digitally.

The company's dividend appears to be quite safe with its steady cash flows and a 51% cash dividend payout rate.

Bank on Midland States Bancorp's dividend

Midland States Bancorp, a community-based financial holding company and sole shareholder of Midland States Bank with 52 branches in Illinois and Missouri, has seen its shares climb more than 43% this year. Despite that, the stock appears to be a bargain, especially when you consider its dividend yield of 4.4% and low P/E (TTM) of 8.8 compared to the average of 15.4 for regional banks.

The company has raised its quarterly dividend for 21 consecutive years and this year increased it 4.7% to $0.28 per share. Over the past five years, it has raised its dividend by 40%. There's plenty of room for more dividend growth too as its payout ratio is a very safe 38%. What gives me even more confidence is the company's net interest income has increased each year since its initial public offering in 2016 and its adjusted diluted earnings per share and its book value per share have increased for four consecutive quarters.

As the economy rebounds from the pandemic, Midland States should benefit because deposits and loans will likely rise. The focus for the company will be to boost net interest income and recurring fee income while keeping operating expenses relatively low.

Gilead Sciences is coming off a banner quarter

Gilead Sciences stock is up nearly 20% for the year, but thanks to strong fundamentals, it has a low trailing P/E of just 11.9. The biopharmaceutical company posted strong third-quarter earnings of $7.44 billion in revenue, up 17% year over year, and EPS of $2.05 compared to only $0.29 in the same period in 2020.

While the company's biggest sales segment remains its HIV drugs, that area saw sales dip 8% year over year to $4.2 billion, primarily because of the loss of patent exclusivity of Truvada and Atripla in the United States. However, that drop was more than made up by the strength of its COVID-19 treatment Veklury, which posted revenue of $1.9 billon in the quarter, compared to $823 million in the same period in 2020. Another big area of growth for Gilead was cell therapies, which saw sales rise 51% year over year to $222 million, led by lymphoma drugs Yescarta ($175 million) and Tecartus ($47 million).

Gilead has increased its dividend for six consecutive years, including a 4.4% bump this year to $0.71 per quarterly share. As of Friday, that represented a yield of 4.13%. The company's cash dividend payout ratio of $37.6% shows it can easily handle more increases. Over the past five years, it has raised its dividend by 51.06%

Some investors may have been scared off because Veklury's sales will wane as the COVID-19 pandemic ebbs and because its two of its biggest HIV drugs have lost patent protection. However, the company's growth in cell therapies and its deep pipeline -- with 45 therapies in clinical stage trials, including 17 in Phase 2 and Phase 3 trials -- will continue to pay off for years.

Making a solid choice

All three are relatively safe dividend stocks that appear to be able to afford paying solid dividends for years to come.

Of the three, I like Western Union the most because it has the highest yield, and because it is maybe a little misunderstood, it has the most room for the stock to grow. The same can be said for Midland Bancorp, which has an incredibly safe dividend payout ratio and the longest tradition of increasing that dividend of the three stocks. Gilead maybe a little pricier than the other two stocks when you look at its valuation, but it also has a safe dividend and likely the most revenue growth potential of the trio.