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Things haven't been that easy for Staples over the past few years. Image source: Staples.

For investors who are nearing retirement, there's nothing more comforting than owning shares of a solid dividend-paying company that promises to be around for the long haul. Many a (big F) Fool have been able to enjoy their retirement without worrying about money because of such stocks.

Staples (NASDAQ:SPLS) has been around since 1986. It has been a publicly traded entity since 1989. And the company has been paying out a dividend for over 10 consecutive years. While others might have a lengthier track record, Staples' history of rewarding shareholders is nothing to be ashamed of.

So for those who do own the stock, the big question heading into 2016 is: Will Staples raise its dividend in 2016?

Let's check under the dividend-paying hood
When it comes to dividend payments, there's no metric more important to watch than free cash flow (FCF). This represents the total amount of money a company brought in from operations (selling office supplies), minus any capital expenditures (buying delivery trucks and building new stores, for example). It is from FCF that dividends are paid out, and the trends in FCF are a good sign of where a company's dividend is heading.

Here's how Staples' FCF has fared over the past four years, with the green section representing the amount of FCF that was used to pay out its dividend.

I won't beat around the bush when it comes to this chart: It's really ugly. What it shows is a business that's been able to bring in less and less FCF every year for the past four years. That may help explain why the dividend has remained unchanged since the beginning of 2013.

The company cut down significantly on capital expenditures in 2016, which helped boost FCF. But if it had continued at the rate of over $150 million per quarter as it had in the past, it's possible Staples would have struggled to pay its dividend at all.

How's the actual business doing?
In order to understand how this could be happening, it's important to figure out how Staples the business is performing. Again, it isn't pretty. Be sure to check out both revenue changes over time, sales via Staples.com, and comps, which represent how much sales have increased or decreased in stores that have existed for at least 12 months.

Once again, this is simply ugly. Fewer and fewer people are buying their office supplies at Staples, and that is showing up on the company's income statement. While Staples.com was providing some relief, that relief is actually shrinking. If you break down the trends even more, Staples.com showed revenue growth of 9% four quarters ago, but that shrunk all the way to 1% for the most recent quarter.

These trends help explain why the company recently decided to lay off hundreds of employees at multiple locations.

Besides these sales slumps, investors also need to keep an eye on Staples' planned acquisition of rival Office Depot. It is increasingly looking like the FTC will not allow the merger to continue -- on anticompetitive grounds. The two companies extended the deadline for the merger until May, but signs are indicating that this deal won't happen.

When you put all of these pieces together -- shrinking FCF, negative comps, and an inability to merge with a competitor to streamline operations -- you don't have a pretty picture. I would say that it's highly unlikely that Staples will be raising its dividend in 2016, and think there are better options out there for dividend investors.

Brian Stoffel has no position in any stocks mentioned. The Motley Fool has no position in any of the stocks mentioned. 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 Motley Fool has a disclosure policy.