Dividend stocks have attracted the attention of investors across the globe in recent years. But even though most investors have come to appreciate the substantial regular income that dividend stocks provide, one thing that most investors don't expect from dividend stocks is strong earnings growth. That led me to ask the obvious question: Do dividend investors really have to sacrifice any chance of scoring big capital gains -- or are there some stocks that let investors have their cake and eat it, too?

Why dividends became more important than ever
Before 2008, relatively few investors paid much attention to dividend stocks. With many dividend-paying stocks being seen as mature companies that were past their prime and didn't have any real growth left in them, looking to stocks to provide income was seen as something that only conservative investors did. And as long as the bull market lasted, investors could get better returns by chasing big capital gains from hot stocks in sectors like housing and commodities.

Then the market meltdown happened, and suddenly, interest in dividend stocks rose to nearly unprecedented levels. When the credit crunch dried up financing for cash-starved businesses, the value of dividend stocks suddenly become clear: The cash flows that financed those payouts also gave dividend-paying companies a safety valve against disruptions in the credit market. Moreover, as interest rates approached zero, savers suddenly realized that traditional income investments like bonds and bank CDs weren't sufficient to meet their cash needs.

Now, though, fear of further difficulties for stocks has given way to greed. More and more prognosticators are calling for continued big gains for stocks, with some even pointing to rises near the lofty levels of 2007 within the next year or two. With the prospect for big returns, no one wants to get left behind -- and some believe that the same stodgy old dividend stocks without any growth prospects that saved them during the market meltdown will only hold them back if the bull market continues.

Mmmm ... cake
So with that in mind, I decided to look for some stocks that would offer investors the best of both worlds. To make dividend seekers happy, I demanded that a stock have at least a 3% yield and have a history of growing its payout at a 10% annual rate or greater over the past five years. But to make sure that you wouldn't get stuck with no-growth stocks, I also added the condition that the company have grown earnings at a 10% clip since 2005 and also be expected to continue to see 10% gains in the next two years.

A dozen stocks met all of those conditions. Here are six of my favorites:


Dividend Yield

5-Year Annual Div Growth

5-Year Annual EPS Growth

Estimated Future EPS Growth

McDonald's (NYSE: MCD) 3.3% 26.8% 15.5% 12.4%
Flowers Foods (NYSE: FLO) 3.1% 24.9% 19.1% 10.1%
Mattel (Nasdaq: MAT) 3.4% 10.8% 10.3% 19.6%
Rayonier (NYSE: RYN) 3.8% 10% 12.9% 26.5%
Healthcare Services Group (Nasdaq: HCSG) 3.9% 34.9% 12.4% 17.1%
Alliance Resource Partners (Nasdaq: ARLP) 4.8% 14.6% 17.2% 40.7%

Source: Capital IQ, a division of Standard and Poor's.

An unexpected bonus is that several of these companies are household names not just for stock investors but for just about everyone. McDonald's has found growth with new offerings like its McCafe coffee, while Mattel continues to leverage its considerable brand presence with deals like its recent licensing pact with video game maker THQ (Nasdaq: THQI).

But some of these companies have eluded the spotlight. Flowers distributes baked goods, which doesn't sound lucrative, but the company has found a profitable niche and has the history to back it up. Alliance is cashing in on coal demand, which only seems poised to accelerate in the years to come -- especially if the economic recovery on which a future bull market would be based comes to pass. Healthcare Services Group does housekeeping and laundry for nursing homes and other senior-oriented health facilities and benefits from an increasingly favorable demographic. And Rayonier gives investors exposure to timberland, a promising commodity that has stayed back in the shadows behind luminaries like gold and oil.

Don't settle for less
Dividend stocks have a reputation for being conservative choices for investors who aren't interested in growth. But that reputation doesn't apply to every dividend stock. Look closely, and you can find stocks that have the growth potential to give you both healthy income and possible big share price gains in the future.

Get the best dividend stocks you can find. Read the Fool's special report, "13 High-Yielding Stocks to Buy Today." It's free.

Fool contributor Dan Caplinger never likes being left behind. He doesn't own shares of the companies mentioned in this article. Alliance Resource Partners and Flowers Foods are Motley Fool Income Investor recommendations. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Fool's disclosure policy always leads the way.