3 Dirt Cheap Dividend Stocks to Buy Hand Over Fist

As the S&P 500 trades near a record high, the market index also trades at a rich valuation. At current prices, it trades for 23.5 times earnings and yields around 1.1%. However, not every stock, including blue chip dividend stocks, currently sports a sky-high valuation.

Three that stand out are Pfizer (NYSE: PFE), T. Rowe Price (NASDAQ: TROW), and Verizon Communications (NYSE: VZ). While each one is "cheap for a reason," the market is overreacting to its respective headwinds.

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Collect a 5.6% yield with Pfizer, as you wait for its post-COVID rebound

After generating strong profits from its vaccine and COVID treatment products, Pfizer experienced a steady drop in revenue and earnings after 2022. Making matters worse, recent and upcoming patent expirations for several of Pfizer's non-COVID drugs, such as Eliquis, continue to put pressure on shares.

Pfizer trades at just 9.6 times forward earnings. Other pharmaceutical stocks with stronger pipelines are trading in the mid-teens or higher. If the company finds success with its current pipeline of drug candidates, including the obesity candidates from its Metsera acquisition, Pfizer could experience both stronger quarterly results and a market rerating.

In the meantime, you can collect the stock's 5.6% dividend. Dividend cut risk isn't off the table, but Pfizer's payout ratio remains manageable, at just under 60%.

T. Rowe Price has more than a bull market on its side

T. Rowe Price's 5% forward dividend yield and its 40-year track record of consecutive dividend growth make it a diamond in the rough. Still, given how index funds continue to grab market share from traditional mutual funds, it's no wonder the market prices it at just 10 times forward earnings.

However, keep in mind that this asset management company has continued to pivot toward products like exchange-traded funds (ETFs). For now, a strong stock market has enabled T. Rowe Price to keep growing its total assets under management (AUM).

However, if a market downturn hits, this pivot could help soften the blow of any AUM decline from market volatility. Based on T. Rowe Price's current payout ratio of around 52%, the company appears well-equipped to maintain and grow its quarterly payouts.

New headwinds for Verizon create a value opportunity

After experiencing a strong rebound from early to mid-2026, Verizon shares are once again in a slump. Chalk this up to ongoing concerns about companies like Space Exploration Technologies (SpaceX) grabbing market share with their competition satellite-based telecom services offerings. However, just like the last time it tanked, there's a new chance to buy Verizon, one of the high-yield dividend stocks, ahead of a rebound.

Why? Despite the perceived threat, Verizon continues to post strong results for now. When it last reported earnings in July, the telecom company reported 550,000 net customer additions in mobility and broadband during second-quarter 2026, an increase of over 230,000 from the prior year's quarter. The company also reported a nearly 10% increase in operating cash flow, suggesting success in implementing its expense-reduction programs.

With SpaceX-related threats already priced in, even a "better than feared" outcome could trigger a relief rally for this stock, which currently has a 6.2% forward dividend yield and trades at less than 9 times forward earnings.

Thomas Niel has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends Pfizer and T. Rowe Price Group. The Motley Fool recommends Verizon Communications. The Motley Fool has a disclosure policy.