Source: Flickr user Kat R. 

Dividend stocks are the cornerstone of many well-run retirement portfolios -- that's a fact. The reason is that dividends act as a beacon to investors, inviting them to take a deeper look into a company whose business model is so sound it can pay out a percentage of its annual profits to its investors on a regular basis.

Further, dividends can provide a downside hedge in volatile and bear markets. Investors in dividend stocks tend to be oriented more toward the long term, which usually makes for less day trading and less volatility. Lastly, dividends can be reinvested, giving buyers a chance to compound gains over the long run. These payouts can mean the difference between simply retiring and living out your dream retirement.

With that in mind, let's have a look at three cheap dividend stocks you should consider buying right now.

1. Telefonica (NYSE:TEF)
An important thing to remember about selecting cheap dividend stocks is that just because something is "cheap" it doesn't mean it's without risk.

Source: Telefonica.

Take Spain-based telecom giant Telefonica as a perfect example. Telefonica has been clobbered by notoriously high unemployment rates in Spain and generally slow growth throughout the entirety of the European Union. Coupled with Telefonica's nearly $52 billion in net debt, it's felt like a pair of concrete blocks has weighed down Telefonica since the Great Recession.

However, things may not be as dire as some on Wall Street might have you believe. Telefonica has done an excellent job of paring back its expenses, shedding non-core assets, and focusing on what works.

For example, Telefonica has been completely shuffling its assets, purchasing Vivendi's GVT for around $9 billion last year (and boosting its market share in Brazil to close to 30% in the process), while also disposing of assets in Ireland and the Czech Republic. A month ago Telefonica also received an offer of roughly $15 billion for its U.K.-based mobile unit. Telefonica has ways to reorganize its assets to emphasize growth while raising cash in countries where its market share or growth prospects aren't as promising.

Source: Telefonica.

Telefonica's investment in its infrastructure is also paying off in a big way with its highest margin customers. In Telefonica's third-quarter report it announced the net addition of 458,000 Pay TV customers (up 41% year over year), an extra 8.5 million smartphone customers (up 43% year over year), and an additional 265,000 fiber customers. Although these high-end consumers are a limited market in the EU, they can more than make up for margin shortfalls in other areas.

Currently, Telefonica is valued at a mere 13 times next year's profit estimates, and is sporting a dividend yield of 5.6%. It's a cheap dividend stock that should be on the radar of more risk-tolerant investors.

2. Duke Energy (NYSE:DUK)
It wasn't a disaster by any means, but electric utility and wholesaler Duke Energy disappointed Wall Street with its fourth-quarter earnings results.

Source: Duke Energy.

For the quarter Duke Energy dropped a number of one-time expenses on investors and surprisingly announced the repatriation of $2.7 billion in foreign earnings. All told, Duke wrote off $100 million in anticipation of a settlement with the U.S. government over the Dan River ash spill (a settlement totaling $102 million was announced just days later), and it took a $373 million charge to cover taxes related to its repatriation of international earnings. Combine these one-time costs with higher maintenance expenses and downtime in its regulated utility segment and it's not hard to figure out why Duke was viewed as a disappointment.

As for me, I viewed Duke's quarterly report as generally bullish, and would encourage investors looking for cheap dividend stocks to give the company a closer look.

For starters, Duke Energy provides a basic need: electricity. Duke nets a good chunk of its revenue from its regulated businesses, which does put its rate increases at the mercy of state-run energy commissions, but which also tends to stabilize demand and reduces its exposure to wholesale electric prices. Demand for electricity doesn't fluctuate too much, and if you own or rent a home, you need electricity, making it very much a basic-need product. In short, over the long-term energy prices are working in Duke's favor.

Source: Duke Energy.

Secondly, I would expect to see less in the way of maintenance expenses in its regulated business, as well as a continued push away from higher-expense fuel sources. Cheap natural gas and reasonably low solar costs are painting a picture for me that implies Duke could reduce its expenses by 1%-2% annually over the next couple of years.

Lastly, I'm excited to see what Duke is going to do with the remaining $2.3 billion in repatriated profits. Duke could initiate a share buyback, boost its dividend, pay out a special dividend, or, what I suspect, look for ways to sustainably boost growth by reinvesting in renewable energy projects while also looking for mid-tier acquisitions.

At 16 times forward earnings, Duke is certainly on my radar, and its 4% dividend yield looks absolutely delectable!

3. Potash Corp. (NYSE:POT)
Lastly, I'd suggest income investors pay close attention to fertilizer company Potash Corp., even though the global producer is much closer to a 52-week high than a 52-week low.

Like many multinational companies, Potash Corp. offered positive guidance for the upcoming year, but tempered expectations in its fourth-quarter earnings report by suggesting that foreign currency translation and weakening global growth could impact its results. The company did, for instance, note that potash shipments are expected to fall from the record 61 million tonnes shipped in 2014, which only served to take the wind out of investors' sails.

Source: Potash Corp.

Yet there are plenty of reasons to believe Potash Corp. has plenty to offer long-term investors.

To begin with, it's a company focused on improving crop yield for farmers. While we can't create additional land, we can improve the yields and turnaround of what's produced from that land. For Potash Corp. it means the expectation of steady demand growth over time as the world's global population increases. Growth could be particularly strong in quicker growing regions of Asia.

Another key point is we've put the breakup of Russian potash cartels in 2013 safely in the rear-view mirror. Prices for the fertilizer did drop as expected, but we've witnessed a stabilization in all three of Potash Corp.'s product offerings (potash, nitrogen, and phosphate). A clearer outlook on prices should help add some predictability to Potash Corp.'s cash flow and profitability.

In addition, if you read between the lines, Potash told investors that its production is apparently being managed more efficiently than that of its peers. The company noted that production constraints for its peers could hinder sales for its competitors and help boost potash sales for Potash Corp. Further, inventory drawdowns in the first half of the year could lead to robust sales in the second half. This commentary implies that potash oversupply and the potential for weak potash pricing isn't a big concern at the moment.

Potash's forward P/E of 16 might not appear "cheap" considering all of the concern surrounding fertilizer pricing in recent years, but improved operating efficiencies could boost Potash Corp.'s growth rate well beyond that of its peers. Plus, it's hard to deny that Potash's 4.1% yield is drool-worthy!