It’s the best of both worlds for investors.

A nice stream of dividends, plus the potential for strong capital gains in the years ahead.

The only problem is that they are difficult to find. That may mean looking for beaten down stocks that can recover – but are still paying decent dividends in the meantime.

Here are three suggestions offering decent dividends plus the potential for strong capital gains.

Flight Centre Travel Group Ltd (ASX: FLT)

The travel agent has its core operations in Australia, but also substantial operations in several offshore locations. All of which are generating decent revenues. What you may not realise is that the company is ranked eighth in Travel Weekly’s 2015 Power List. Flight Centre currently offers a trailing dividend yield of 4.9% at the share price of $32. But that’s a far cry from its 52-week high price of above $45, despite the strong potential for Flight Centre to be much larger in 5-10 years’ time.

Woolworths Limited (ASX: WOW)

The supermarket operator has its own share of well-documented issues, from competition by lower-priced competitors – to issues with Big W – and the ongoing finalisation of its home improvement division. However, the company currently pays out a trailing dividend yield (fully franked) of above 5%. Earnings and dividends may fall in the short-term, but you only have to look at the turnaround at rival Coles since 2009 to see what Woolworths is capable of.

Retail Food Group Limited (ASX: RFG)

Retail Food Group is the master franchisor of 12 different brands including Gloria Jeans, Pizza Capers, Crust Gourmet Pizza, Michel’s Patisserie, Brumby’s Bakery to mention just a few. What many investors don’t realise is that the company had 2,509 outlets at the end of December 2015 (as well as a growing wholesale division) of which ~30% are located outside Australia. Retail Food said it was on track to commission 250+ outlets in the 2016 financial year (FY16).

As a result, net profit is expected to be up ~20% in FY16 – and the company still boasts a growing dividend yield of 4.3%.

Foolish takeaway

It can be difficult to find companies offering both growth and decent dividends. I think the three stocks above can offer that.

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Motley Fool writer/analyst Mike King owns shares in Woolworths and Flight Centre Travel Group. You can follow Mike on Twitter @TMFKinga

The Motley Fool Australia has no position in any of the stocks mentioned. 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 Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.