Smiling diverse couple holding Christmas presents while walking through a winter forest

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I just came back from the mall. I was doing last-minute Christmas shopping, but I ended up buying more things for myself than intended. To be fair, I haven’t been to the mall for months!

To be honest, I was a bit disappointed, because I didn’t see a lot of sales for the things I was buying. Does this indicate that the economy is fine and healthy? Anyway, I’m back home now, and I’m looking for a Christmas sale in stocks to find a balance. I’m certainly having much better luck finding quality stocks for a cheap price!

If you’re still looking for the perfect gifts, here’s another option — buy dividend stocks as Christmas presents! Here are two dividend stocks that are on sale.

Put this high-yield dividend stock under your Christmas tree

TC Energy (TSX:TRP)(NYSE:TRP) is a stable dividend stock. It has a track recording of increasing its dividend for 20 years straight. At about $58 per share at writing, it provides a juicy dividend yield of 6%, which is above average. Its last dividend hike was in the first quarter of 2021. This means that it will be increasing its dividend again soon in the next quarter!

Notably, on TC Energy’s Investor Day on December 1, the company warned that its dividend growth is set to lower to 3-5% compared to the previous guidance of 5-7%. Management thinks it’s a better use of capital to invest in the business for longer-term growth.

The dividend stock is already well positioned in natural gas infrastructure, which makes up 77% of its portfolio today. (Natural gas is a relatively clean source of energy.) TC Energy sees its Power and Storage weighting growing, as the decarbonization transformation unfolds. Its $29 billion capital program through 2026 consists largely (+95%) of Natural Gas Pipelines and Power and Storage projects, which are precisely investments needed for global decarbonization.

The high-yield stock declining about 15% from the 52-week high of $68 per share is a good place to start considering for passive income. TC Energy is a perfect stocking stuffer for children’s RESPs or your spouse’s TFSA.

Another dividend stock to buy on Christmas sale

Algonquin Power & Utilities (TSX:AQN)(NYSE:AQN) is a younger Canadian Dividend Aristocrat than TC Energy. The latter’s dividend-growth streak is double Algonquin’s. By buying the dividend stocks, you’re supporting the decarbonization movement.

Algonquin has a diversified portfolio of regulated utilities and renewable power facilities. The business mix is about 80% in the former and 20% in the latter after its acquisition of Kentucky Power for almost US$2.85 billion, including the assumption of $1.22 billion of debt. Management sees the opportunity to green the fleets of the regulated utility that’s full of coal.

The dividend stock has corrected approximately 20% from this year’s high, pushing its yield to close to 5%. What a great gift AQN stock is for Christmas!

Investors should note that Algonquin will be hosting its investor day on December 14, which is the coming Tuesday. So, it could be worthwhile to wait until you review the contents of the presentation before considering buying.

The Foolish investor takeaway

Because of their big dividends, TC Energy and Algonquin are set up to generate solid returns no matter if the stock market goes up or down. They’re excellent starter stocks for new investors to learn from. Currently, analysts think the dividend stocks are undervalued by about 14% and 19%, respectively.

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