Cheaper stock valuations are good news for most investors, but income investors have an extra reason to be excited when they see prices fall on dividend stocks they are interested in. That's because dividend yields rise as stock prices fall, pushing potential returns even higher.

Still, it's generally not a good idea to simply chase higher yields, because when dividend stocks' prices fall it's often for good reasons like declining profitability or weak long-term growth prospects. That's why income investors have to be choosy about the stocks that they add to their portfolios.

To illustrate the first point, let's look at a few attractive dividend stocks that have become cheaper in recent months. Here are some good reasons why dividend stocks Home Depot (HD 0.16%) and Procter & Gamble (PG 0.67%) are good buys right now.

1. Home Depot

Home Depot has paid a regularly increased quarterly dividend for nearly 40 years, although a pause to its annual payout increases during the Great Recession kept it from a consistent streak of annual raises over that timeframe.

There's a lot for dividend investors to love about Home Depot. The company leads the home improvement industry in key metrics like market share growth. Its finances are sparkling, too, with profitability well above rival Lowe's and excellent cash flow and return on invested capital. Home Depot has seen a stock price appreciation of 294% over the past decade (compared to 166% for the S&P 500), but the price is down about 6.4% so far in 2023. That price drop is likely why Home Depot's dividend yield has risen above 2.8%.

Yes, the business is enduring a rough patch right now as consumers scale back on home improvement spending. And conditions could deteriorate further if a recession develops. But Home Depot has thrived through many industry downturns in the past, meaning investors have a good chance at enjoying strong returns by holding this stock over the long term.

2. Procter & Gamble

Procter & Gamble share prices are trailing the market's 11.4% increase so far in 2023 (they're down 4.8%). But the business is setting new records. Management raised its sales outlook in late April, in fact, and signaled that cost pressures might finally be starting to ease after over a year of elevated expenses.

On the downside, P&G is reporting weaker sales volumes thanks to the combination of slower consumer spending and higher prices. The stock's short-term returns may remain pressured until the company can show a healthier balance between rising prices and higher volumes.

But P&G is winning market share in its massive global industry while trouncing peers like Kimberly-Clark in profit margin and cash flow generation. These factors make the stock attractive in any environment, but especially so when there's a higher chance of a recession developing.

P&G, like Home Depot, wouldn't be immune to the impacts of a recession. But factors like its leading market share, ample cash flow, and high profit margin all point to excellent shareholder returns. And those returns will be bolstered by P&G's dividend, which it recently hiked for a 67th consecutive year and currently yields 2.6%.

That streak of annual increases is among the longest in the entire stock market and underscores the benefits of its large, highly efficient consumer staples business. Thanks to skittishness on Wall Street, income investors can own that business at a discount today.