QBE Insurance Group Ltd (ASX: QBE), Qantas Airways Limited (ASX: QAN) and Rio Tinto Limited (ASX: RIO) are three dividend shares I wouldn’t buy today. In fact, relying on their dividends for income could be hazardous to your wealth.

QBE Insurance

Insurance companies like QBE make money in two ways: 1) On the premiums they write, such as on car, contents and household insurance; and, 2) by investing the ‘float’, which is basically all the cash they have on hand from the premiums they’ve written plus the cash they put aside in reserve for catastrophes.

Unfortunately, both ways that insurance companies make money is coming under pressure. Competition is growing and interest rates on cash investments remain lacklustre (though, US interest rates could rise soon). As an added uncertainty, sometimes natural weather events can have a significant effect on profits. Specifically for QBE, legacy issues have plagued the company for many years. So while the company could turn its fortunes around, I think it’s too early to rely on its dividend payments, just yet.

Qantas Airways

The only time I’ve ever known ‘investors’ to make meaningful amounts of money investing in airlines has been over the past two years. And this has had little to do with the airlines themselves. Plummeting oil prices have lowered their cost base significantly, at a time when capacity on flights has held up. But with competition growing and the oil price again on the rise, it could be time to look elsewhere for dividends and growth.  

“Investors have poured their money into airlines and airline manufacturers for 100 years with terrible results…it’s been a death trap for investors.” — Warren Buffett, during a Berkshire Hathaway annual meeting, as quoted by Forbes.

Rio Tinto

Continuing the theme of companies providing a commoditised product in competitive industries, Rio Tinto’s share price, and dividends are at the mercy of market prices. While the company has cost leadership across some assets (like iron ore) you should remember materials markets move in cycles spanning many years, taking company profits along for the ride.

While Rio Tinto is unlikely to go bust even in dire market conditions, the ebb and flow of markets make it an unsuitable income investment in this Fool’s opinion. Fellow miner BHP Billiton Limited (ASX: BHP) was recently forced to cut its dividend following a fall in commodity prices and an incident at one of its mining operations in South America.

Foolish takeaway

Investors should understand that dividends are not guaranteed and are in fact at the discretion of management and boardrooms. So if you intend to rely on dividend income, it’s vital you diversify your wealth across a number of individual shares and markets. Look for companies with multiple operational divisions, competitive advantages, strong balance sheets and capable management.

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Motley Fool Contributor Owen Raszkiewicz does not have a financial interest in any company mentioned in this article. Owen welcomes -- and encourages -- your feedback on Google+, LinkedIn or you can follow him on Twitter @ASXinvest.

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.