I wrote about AT&T (NYSE:T) in early September and advised that prudence should govern any decision about T stock. Since that article, T stock is down 6%. However, most of that occurred after the ex-dividend date for the company’s upcoming Nov. 1, 2021 dividend payout. Score one for prudence.  

Investor sentiment began to sour in May 2021. That’s when AT&T announced that it was spinning off Warner Media. The move will make Warner Media a separate business unit that will merge with Discovery (NASDAQ:DISCA). The standalone entity will be called Warner Bros. Discovery.  

However, in doing so, AT&T also said if would be cutting its dividend. And management said the cut could be as much as 50%. Investors will still receive AT&T’s current dividend until the spinoff is finalized. However, it seems that many investors have made up their mind. So maybe prudence isn’t all it’s cracked up to be. 

Investors Can be a Fickle Bunch 

For years, AT&T was criticized for wandering too far afield. The wireless giant seemed to want to be an entertainment conglomerate. First it acquired DirecTV in 2015. In fairness, the deal made sense on the surface as it created a way for AT&T to bundle services. However, it failed to anticipate the cord-cutting initiative. This made DirecTV an albatross as demand for satellite television dropped significantly.  

By contrast, the decision to merge with Time Warner seemed doomed from the start. And adding insult to injury, the company accumulated significant debt that left it undercapitalized when it came time to launch its 5G network.  

So investors should be delighted to see that AT&T is getting back to its roots. But as of this writing, T stock is at a 10-year low. That tells a different story.  

Will 5G Plan Deliver the Growth? 

At issue is the disquieting belief that AT&T is late to the party to achieve 5G supremacy. According to Grand View Research, the global 5G services market “is expected to grow at a compound annual growth rate (CAGR) of 46.2% from 2021 to 2028.”  

That means there’s a lot of meat on that bone. But investors may be losing their appetite for T stock. And when AT&T makes moves such as endorsing spectrum guardrails, it leaves investors with the impression that the company knows it has a lot of ground to make up.  

The Bottom Line on T Stock 

At this point, I don’t blame investors for seeing AT&T as a bad investment. At the moment it’s not a growth stock. Then again, as InvestorPlace’s Will Ashworth recently pointed out, it hasn’t been a growth stock for several years. Ashworth wrote recently that “a $10,000 investment in T stock 15 years ago would be worth $15,144 today.” That’s less than half of what that same investment would be worth had it been made in the S&P 500.  

This is where expectations are important. If investors expect T stock to go back to its pre-pandemic high, they’re likely to be disappointed. However, if investors can get slow and steady stock-price growth, T stock seems more intriguing. Keep in mind that Verizon (NYSE:VZ) stock has grown 10% in five years. So that same $15,000 investment would be worth $11,000.

So that means it comes down to the dividend. And for insight on that, I’ll give a nod to my InvestorPlace colleague Joseph Nograles who made, I believe, a valid point about the dividend. For years, AT&T’s dividend was seen as being a house of cards that would collapse under the weight of its debt. It’s important for dividend-minded investors to remember that it’s better for the company to be cutting its dividend as a leaner, and ostensibly, more profitable entity.  

If that’s the case, then the dividend issue will take care of itself over time. None of this is to say that T stock is a great buy. I would certainly want more confirmation that the stock has hit a bottom. But if it has, it may be worth a look trading at a 10-year low.  

On the date of publication, Chris Markoch did not have (either directly or indirectly) any positions in the securities mentioned in this article. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.  

Chris Markoch is a freelance financial copywriter who has been covering the market for seven years. He has been writing for InvestorPlace since 2019.