Two weeks ago, we examined two tech stocks that serve oil and gas firms and are able to profit despite lower oil prices (The profits of these two energy stocks stand up to current oil prices). Today, we look at two Canadian companies that provide essential services to a range of clients, including many in the oil and gas industry.

While Wajax hopes to see improved earnings after a typically slow first quarter, McCoy Global had an 86% jump in earnings in its latest quarter—and both have high-yielding dividends that appear sustainable. We view these two as value stocks with a positive long-term outlook that will improve as commodity prices recover.

WAJAX CORP. (Toronto symbol WJX; www.wajax.ca) sells and services cranes, forklifts and other heavy equipment. It also provides related parts (such as bearings, motors, hoses and fittings) and power systems (including diesel engines and transmissions).

The company’s customers are in the natural resource, construction, manufacturing and transportation industries.

In the three months ended March 31, 2015, Wajax’s revenue fell 4.3%, to $317.2 million from $331.4 million a year earlier, as mining, oil and gas and oil sands firms made fewer purchases.

Earnings declined 14.0%, to $5.7 million, or $0.34 a share, from $6.7 million, or $0.40. The first quarter is typically Wajax’s slowest, as some of its clients have winter shutdowns.

The company needs sustained growth in Canadian mining and oil and gas drilling to keep its revenue and earnings rising, but its long-term outlook is positive.

Wajax’s long-term debt of $236.1 million is a high 57% of its market cap, but it has just raised $74.8 million in a share issue to pay down some of that debt.

The stock trades at just 11.4 times Wajax’s forecast 2015 earnings of $1.80 a share, though that estimate could prove optimistic if commodity prices are slow to recover. The stock yields 4.9%, and the dividend looks sustainable.

Recommendation in Stock Pickers Digest: BUY 

Value stocks: Profits up for McCoy Global despite tough markets—lower Canadian dollar helps, too

MCCOY GLOBAL (Toronto symbol MCB; www.mccoyglobal.com) sold its heavy-duty truck-trailer unit last year and is now focused on its Energy Products and Services segment, which sells hydraulic gear, including power tongs, for drilling rigs. (Power tongs are large wrench-like tools that tighten and loosen the pipe in the drill hole.)

McCoy has international sales and service centres in Singapore, Dubai and Aberdeen, Scotland.

The company’s revenue fell 5.2% in the three months ended March 31, 2015, to $25.8 million from $27.2 million a year earlier. Low oil and gas prices prompted clients to cut back on equipment purchases.

However, excluding one-time items, earnings jumped 86.5%, to $2.2 million, or $0.08 a share, from $1.2 million, or $0.04. Cost cuts and improved efficiency were the main reasons for the gain. As well, McCoy sells most of its products in U.S. dollars, so it benefited from the decline in the Canadian dollar.

Due to falling oil and gas prices, McCoy is forecast to earn $0.21 a share in 2015, down from $0.34 in 2014. Drilling activity has slowed, particularly in North America, but the company’s clients include global drilling giants like Weatherford, Baker Hughes, Halliburton and Tesco, which have a broad geographic reach and a wide range of customers.

The company holds cash of $31.5 million, or $1.14 a share, and has no debt. The stock yields a high 4.4%, and the dividend appears safe.

Recommendation in Stock Pickers Digest: BUY for aggressive investors