An article in Barron’s suggests that “dividend-paying stocks might not be as safe as they look.” Many “companies have been raising their dividends while their earnings growth has slowed or even evaporated altogether.” This is important to the overall market: in 2015 alone, the S&P 500 fell 0.7% on a price basis but rose 1.4% when dividends are included. Since 1969, the same market’s return is four times higher when dividends are included than solely on price appreciation. Currently, S&P 500 companies are paying out 41% of earnings in dividends, which Convergex strategist Nicholas Colas describes as “the high end of normal.” However, with demand for dividend-paying stocks rising on the low likelihood of further Fed rate increases, that could “mean trouble.” Colas points out: “Companies got too enthusiastic about increasing dividends when things were good, and now are being asked to support them at high percentages of net income.” Iman Brivanlou of TCW says this means sustainability of dividends should take precedence so he is avoiding companies that may be affected by oil price changes (in either direction) and looking at companies with, as Barron’s puts it, “the ability to pay dividends no matter what the economy does,” such as consumer staples, utilities, and telecoms.