Narratives are vitally important in the stock market. In the case of AT&T (NYSE:T) stock, it isn’t particularly positive.

That’s because AT&T has undergone a very long period of stagnation. Despite multiple attempts to revitalize its business and increase share prices, not much has changed. A decade ago, T stock was trading around $28 to $29. Today it trades at $25.

One of the more compelling reasons to consider investing in AT&T right now is its dividend. That 10-year-loss turns into a near-50% gain when you include the dividend. It currently offers a very high 8.32% yield. That is appealing in and of itself. But it really requires contextualization in order to understand it.

T Stock Dividend Not So Great

The truth is that AT&T has been steadily and predictably increasing its dividend since early 2004, by about a penny each year with near clock-like precision. The result is that T stock’s dividend has risen from 31 cents in 2004 to nearly 52 cents today.

My point here is that AT&T isn’t choosing to reward investors with a high-yield dividend. The dividend’s mega yield is simply a consequence of a declining share price and the company choosing to remain among the dividend aristocrats.

The company wants to maintain the status that dividend aristocrat status lends it. And in order to do so it must maintain or increase its dividend.

So, even though AT&T’s yield is above 8%, that’s only due to declining share price (annual dividend/current share price).

AT&T isn’t choosing to drastically increase its dividend in order to reward investors. Instead it has very slowly and incrementally increased that dividend. The only reason yield is high is that share prices are nearing historic lows.

Double-Edged Sword

The last time AT&T increased its dividend was immediately preceding the onset of the pandemic. In January of 2020, the company raised its dividend from 51 cents to 52 cents.

That’s where it has been ever since. Sans dividend, meanwhile, T stock is down more than 35% since then.

The company had a consistent pattern of maintaining the dividend for four quarters and then raised it 1 cent. But now it’s been sitting at 52 cents for eight straight quarters.

AT&T deserves some leeway here: The pandemic is a generational event. Nevertheless, it is straining the company’s financial standing. And that will place additional pressure on the dividend.

Weaker Results Further Dividend Questions

Q3 results weren’t great for the company. Revenues decreased 5.7% to $39.9 billion, from $42.3 billion in Q3 2020.

I said that AT&T deserves some leeway due to the pandemic. But at the same time, you’ll note that Q3 2020 was also in the middle of the pandemic. Revenues were higher then. They’ve declined from then and you can’t attribute that to broad pandemic headwinds.

Let’s get back to the dividend discussion. The weaker results place added pressure on AT&T in relation to its dividend.

Simply put, AT&T has to balance weaker results with the necessity of paying that 52-cent dividend.

And that should make investors rightly question whether that dividend is in jeopardy. AT&T could decrease it in theory. But that would trigger a cascade of negative results which would send prices plummeting.

T Stock’s Aristocrat Days Are Numbered

I don’t see any reason to invest in AT&T right now. The high yield dividend is the consequence of arithmetic. Nothing more. Frankly, it looks like T stock could lose its place among the dividend aristocrats.

AT&T is transitioning toward wireless and broadband from media and telecom. That hasn’t translated to increased revenues. Instead there are real cracks emerging. Q3 numbers are weaker. The dividend shouldn’t entice investors. At best it will improve by a penny per year based on historical precedent. That won’t occur until the company’s latest pivot materializes. And that may not happen at all.

On the date of publication, Alex Sirois 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.comPublishing Guidelines.

Alex Sirois is a freelance contributor to InvestorPlace whose personal stock investing style is focused on long-term, buy-and-hold, wealth-building stock picks. Having worked in several industries from e-commerce to translation to education and utilizing his MBA from George Washington University, he brings a diverse set of skills through which he filters his writing.