Dividend stocks are everywhere, but many just downright stink. In some cases, the business model is in serious jeopardy, or the dividend itself isn't sustainable. In others, the dividend is so low, it's not even worth the paper your dividend check is printed on. A solid dividend strikes the right balance of growth, value, and sustainability.

Today, and one day each week for the rest of the year, we're going to look at one dividend-paying company that you can put in your portfolio for the long term without too much concern. This isn't to say that these stocks don't share the same macro risks that other companies have, but they are a step above your common grade of dividend stock. Check out last week's selection.

This week, we'll hop on over to the oil and natural gas drilling equipment and service sector and examine why Halliburton (NYSE:HAL) makes for an attractive future income play.

An ongoing case of finger-pointing
The demand for oil and natural gas is only rising, yet the methods by which companies are extracting oil and gas are under as much scrutiny as ever. Much of this, especially in the U.S., can be tied back to the BP (NYSE:BP) Macondo well oil spill in 2010. The first phase of an ongoing trial to determine fault and who is truly responsible for spilling some 200 million barrels of crude into the Gulf of Mexico wrapped up this week. Halliburton is one of the companies implicated in the trial, since both it and Transocean (NYSE:RIG) were contracted out to provide servicing and equipment on the well. Transocean provided the workers and rig itself, while Halliburton provided the cement seal around the well. The outcome of this case could certainly put an unwelcome dent in the balance sheets of any of these three companies if they're found guilty of any wrongdoing.

Another avoidance aspect of the Halliburton and the sector relates back to the unknown about fracking -- the act of using high water pressure to break rock shale so a driller can get to oil or gas trapped deep underground. Environmental concerns regarding the potential for fracking to contaminate local and large water supplies continue to weigh on its use to retrieve underground oil and gas.

Halliburton's huge opportunity
Yet for all these concerns, Halliburton remains one of the most widely contracted and in-demand oil equipment and service companies in existence. Its fourth-quarter report, released in January, delivered its highest quarterly revenue ever at $7.3 billion. More importantly, in spite of just a 3% sequential revenue increase and weakness in North American sales, Halliburton was able to rely on incredibly robust overseas growth to drive revenue higher. Its Latin American revenue rose 14% from the third quarter in spite of a 2% drop in rig count, as it benefited from higher software sales in Mexico and Colombia. Middle East/Asia also contributed 14% sequential revenue growth, as software and equipment sales in Saudi Arabia and Australia remained consistently strong.

Another factor that makes Halliburton a particularly intriguing play, especially in the Gulf of Mexico, is the major worldwide boom in oil and gas reserves, and an increasing demand for drilling rigs.

Offshore Rig
Source: U.S. Department of Energy. 

According to the most recent IHS Petrodata weekly rig count, fleet utilization rates in the Gulf of Mexico are up 600 basis points to 70.6% from the year-ago period. In fact, aside from South America, where utilization rates are constant from the year-ago period, all regions are showing higher fleet utilization rates. This bodes well for Halliburton when it comes time to secure additional contracts and beef up its backlog.

Domestically, and adding to the point, the Gulf of Mexico is an opportunity for rapid growth in ultra-deepwater drilling. As my Foolish colleague Travis Hoium pointed out in January, Seadrill (NYSE:SDRL), a competitor to Halliburton, has about half its fleet contracted into 2017, demonstrating oil and gas companies' commitment to the region and belief that returns and finds will be sustainable. With the U.S. pushing for increased energy independence, Halliburton's name should be called often when it comes to Gulf of Mexico servicing and equipment contracts.

A soon-to-be gusher of a dividend
However, the real reason we're taking a closer look at Halliburton today has to do with its renewed focus on shareholders. While Halliburton has always strived to boost sales and its bottom line, it's improved on two initiatives meant to drive value straight into shareholders' pockets.

The first action became effective as of Feb. 1 and includes the company's commitment to make systemic share repurchases of up to $1.7 billion. If Halliburton's board were to utilize this entire buyback, it would reduce its outstanding share count by roughly 4.8%, adding value to shareholders' remaining shares.

The more intriguing aspect of Halliburton's plan to return value to shareholders was its 39% quarterly dividend increase from $0.09 to $0.125. Halliburton's board has a plan to return 15% to 20% of net income to shareholders in the form of a dividend each year. At $0.50 annually, that translates to about $466 million paid out in dividends.

G
Source: Nasdaq.com.
*Assumes $0.125 payment for remainder of 2013. 

Based on Wall Street's estimated 2014 EPS of $3.92, this means Halliburton -- assuming it pays out the maximum 20% of net income as a dividend -- could increase its annual payout from $0.50 to as high as $0.79 in less than two years.

Foolish roundup
Some investors will look at Halliburton's 1.2% yield and call me nuts for even suggesting the company as a potential income play. To those skeptics I'd like to point out that Halliburton has already doubled its payout to shareholders over the past eight years, has paid a dividend to shareholders since 1947, and could be entering a new period of rapid growth if fracking becomes a popular oil and gas retrieval method. At a mere 10 times forward earnings and with a projected growth rate of 16% over the next five years, Halliburton looks to me like a solid candidate for those looking for future dividend income and share price appreciation.

Fool contributor Sean Williams has no material interest in any companies mentioned in this article. You can follow him on CAPS under the screen name TMFUltraLong, track every pick he makes under the screen name TrackUltraLong, and check him out on Twitter, where he goes by the handle @TMFUltraLong.

The Motley Fool owns shares of Seadrill and Transocean and recommends Halliburton and Seadrill. Try any of our Foolish newsletter services free for 30 days. We Fools don't 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.