The COVID-19 pandemic dramatically altered the way in which many people work. Today, it's easier than ever before to have a side hustle, multiple freelance gigs, and even different revenue streams -- all the while working from home.

Even with the dawn of the gig economy, one of the most tried-and-true methods for generating passive income is through dividend stocks. Dividend-paying stocks can be especially important during times of economic turbulence and market volatility because they provide income without the need to sell stock. In this vein, an investor doesn't have to worry as much about short-term stock prices.

Starbucks (SBUX 1.49%), JPMorgan Chase (JPM 0.25%), and The Home Depot (HD 1.62%) are three excellent dividend stocks that also happen to be inexpensive. Here's what makes each company a great buy now.

A person stacks gold coins in piles on top of gold and black hexagons.

Image source: Getty Images.

1. Uncertainty is grinding Starbucks' stock price toward a 52-week low

Starbucks' stock is down 35% from its all-time high for several reasons -- many of which are valid. Investors don't like uncertainty, and Starbucks has a lot of it. Howard Schultz is back as interim CEO, but we don't know for how long. Starbucks cut its share repurchase program, and we don't know the company's plans for the dividend. Starbucks has implemented several price hikes, which will be tested as inflation continues to rise. And finally, the Starbucks unionization issue is heating up.

However, none of these issues take away from Starbucks' long-term investment thesis. The company posted record-high revenue in 2021 and the second-highest net income in its history after 2018. Starbucks remains one of the most powerful food and beverage brands in the world and the most recognizable coffee chain in the world.

The good news is that investors are getting compensated for all of Starbucks' uncertainty. The stock currently trades at a price-to-earnings (P/E) ratio of just 21.8 -- well below its five-year median P/E ratio of 29.8. 

It's also worth mentioning that although Starbucks cut its buyback program, it has yet to mention any alterations to its dividend program. Starbucks has paid and raised its dividend every year since 2011. Given the importance of the dividend and Starbucks' ample free cash flow, it would stand to reason that the company will simply eliminate share buybacks to free up capital to grow the business -- but still pay and raise the dividend. Starbucks has a dividend yield of 2.5%.

2. The leading bank stock is simply too cheap to ignore

With a market cap of $386 billion, JPMorgan Chase is the most valuable bank in the U.S. and the third-most-valuable financial services company behind Berkshire Hathaway and Visa.

JPMorgan stock currently has a P/E ratio of just 8.6. Excluding the brief, pandemic-induced stock market crash in spring 2020, JPMorgan stock has never traded at a P/E ratio below 10 in the last eight years.

JPM PE Ratio Chart

JPM PE Ratio data by YCharts.

The stock may look cheap, but comments from CEO Jamie Dimon's annual letter to shareholders on April 4 signal that there are a lot of headwinds facing both the U.S. economy and banks as well. JPMorgan could face a slowdown in growth -- and potentially a prolonged period of lower return on equity (ROE).

However, JPMorgan has proved through multiple economic downturns that it has staying power. Given the inexpensive valuation and a 3.1% dividend yield, JPMorgan looks like a great long-term buy now.

3. Home Depot can be a foundational stock in a diversified portfolio

Shares of The Home Depot are hovering around a 52-week low -- down over 25% from its all-time high. Yet zoom out, and Home Depot stock is still up a lot from its pre-pandemic levels.

Home Depot benefited from a surge in do-it-yourself projects during the pandemic as well as a scorching-hot housing market. However, rising interest rates are leading to higher mortgage interest rates, which isn't a good sign for the housing market going forward. The issue now is that both home prices and mortgage rates are high, whereas in 2020 and 2021, home prices were high, but debt was so cheap that people could afford new homes anyway.

Pair rising interest rates with inflation, and Home Depot is in for tough comps in 2022. Despite the short-term challenges, Home Depot remains a powerful brand and a great dividend stock. Home Depot has never cut its dividend since paying it in 1987. It would be a Dividend Aristocrat -- which is an S&P 500 component that has paid and raised its dividend for at least 25 consecutive years, but Home Depot suspended dividend raises during the financial crisis. Home Depot stock has a dividend yield of 2.5% and a P/E ratio of 19.8 compared to a five-year median P/E ratio of 23.3. 

Sit back and collect passive income from this diverse trio

Investing by equal parts in Starbucks, JPMorgan, and Home Depot gives an investor an average dividend yield of 2.7% and exposure to the food and beverage industry, the financial sector, and the home improvement industry. What's more, an investor can rest easy knowing that no matter what the market throws at them, all three of these companies will likely remain relevant and probably grow to become a lot bigger in the decades to come.