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CELP And GSJK: Have Your Ice Cream And Eat It Too

|Includes: CCLP, Cypress Energy LP (CELP)

Investors often tend to overlook dividend stocks in favor of securities which reinvest profits in the growth of core business. This is not a bad approach but it eliminates stocks which offer both dividend and capital growth. Although this category is small, dividend champions such as Cypress Energy Partners LP (NYSE: CELP) and Compressco Partners LP (NASDAQ: GSJK) have also rewarded investors with price appreciation.

Cypress Energy Partners LP trades just 9.3 percent below its 52-week high of $25.7 per share and still provides an impressive 5.2 percent annual dividend yield. The company offers saltwater disposal and other water and environmental services apart from pipeline inspection and integrity services to its clients. Thanks to the boom in the unconventional hydrocarbons in the U.S., the company has seen sharp increases in its revenues and profits in recent years.

The company operates seven saltwater disposal facilities in the Bakken shale region in addition to two in the Permian Basin. The company had annual revenue of $12.8 million in 2012 which increased to $22.4 million in 2013. Given that the infrastructure is still in the development phase at several places to capture shale gas, the company has years of sharp top line and bottom line growth ahead. How this growth is likely to play out can be seen in the stock's valuation. While the stock trades at a price earnings multiple of 29.3 on the basis of past 12 month earnings, robust earnings growth in future pegs the valuation to just 14.8.

Another solid player in the oil and gas sector is Compressco Partners LP, which offers compression-based production enhancement services for natural gas and oil exploration and production companies. The company has solid fundamentals that include a balance sheet with a debt equity ratio of just 0.2 and a constantly growing top line. The stock has gained 37 percent over the last 12 months and yet offers a fantastic annual dividend yield of 7.1 percent as the payout has kept pace with surging prices. Capital prices have been largely aided by the rapidly improving financial health.

Surging demand of the company's services has lifted its annual revenues from $81.4 million in 2010 to $121.3 million in 2013. In the same time frame, the company's profits grew from $1.6 million to $17.6 million. This streak is expected to continue as indicated to the stock's forward valuation of 15.3 times its earnings. Although the company witnessed top line pressure in the latest quarter, its profits still grew in an indication of still growing margins.

Disclosure: The author has no positions in any stocks mentioned, and no plans to initiate any positions within the next 72 hours.