If you're concerned about rising valuations in the stock market or just want some reliable income for your portfolio, now may be an optimal time to load on dividend stocks, many of which are looking incredibly cheap. While growth investors have largely looked past dividend stocks this year, the good news is that if you're targeting these types of investments right now, you don't have to look far to find some good deals.

Three stocks that pay you more than the S&P 500 average yield of 1.2% and which are trading at cheap valuations include Merck (MRK -0.17%), Verizon Communications (VZ -0.10%), and Albertsons Companies (ACI 0.45%). Here's why these can make for excellent income-generating investments to add to your portfolio today.

Merck

Merck is a top drugmaker that pays an attractive dividend yielding 3.2%. Its stock has declined by 7% this year as the company hasn't been generating particularly strong growth numbers, and investors may also be concerned about what lies ahead for the business. For the full year of 2024, Merck is projecting revenue to total around $64 billion, which is roughly a 7% increase from the $60 billion it posted last year.

While those results aren't necessarily bad, investors may be more concerned that with top-selling drug Keytruda losing patent protection later this decade, Merck's top line may come under pressure in the years ahead, and its growth rate could become even smaller. However, the company has been investing in its growth, with recently approved Winrevair, a treatment for pulmonary arterial hypertension, potentially generating around $4 billion in revenue for Merck in the future. It also has Gardasil, a vaccine that offers protection against the human papillomavirus, which could bring in $11 billion in sales by 2030.

Merck has big shoes to fill, as Keytruda brought in a whopping $25 billion in 2023. However, with a focus on development and growth, there's still time for the healthcare company to diversify its business and develop more drugs. And with the stock trading at just 10 times next year's estimated future profits (based on analyst estimates), investors are getting it at a great discount to help compensate for the risk and uncertainty ahead. Merck's modest payout ratio of 64% also suggests the dividend is in no imminent danger.

Verizon Communications

One dividend stock I wouldn't hesitate to pick up today is Verizon. It's yielding 6.1%, and the company has been raising its dividend payments for 18 straight years.

The business is growing in just the low single digits this year, and that hasn't been enough to get investors excited about the company. While the telecom stock is up around 17%, its high yield and modest forward price-to-earnings (P/E) multiple of 9 suggest that investors are still holding back and that there could be a lot more upside left if you buy today.

The company's move to acquire Frontier Communications for $20 billion could give investors some new hope that the business is looking to expand and become a bigger player in the growing fiber market. The downside is that it will mean around $10 billion in additional debt for Verizon to help fund the deal, which risk-averse investors generally aren't thrilled with, especially with interest rates remaining fairly high.

But with Verizon's stock trading at a modest earnings multiple and more rate cuts potentially around the corner, this is a stock that looks reasonably safe. Dividend investors shouldn't hesitate to load up on Verizon as the stock could have a lot more upside given its heightened growth prospects and terrific track record for dividend growth.

Albertsons

The lowest-yielding stock on this list belongs to Albertsons, which has a yield of around 2.4%. However, this low-volatility stock has averaged a beta value of around 0.3, which could make it an ideal option for investors who just want a good and safe income investment to buy and hold. Albertsons is a big name in the grocery business, and that can make it a dependable stock to hang onto for years.

The company generated steady revenue growth of a little more than 1% for the period ending Sept. 7, with sales totaling $18.6 billion. This is no growth machine, but the company is investing in its digital business, where sales grew by 24% last quarter.

Albertsons stock trades at a forward P/E of less than 10 and is another cheap investment to own right now. And if its merger with Kroger goes through, the stock may turn out to be an even better buy as the combined business would be an even bigger player in the grocery industry.