AT&T (NYSE:T) sports one of the slowest-growing dividends among the 30 Dow Jones Industrial Average (DJINDICES:^DJI) components. Over the last decade, AT&T's payouts have grown by an average of 3.9% a year. At the other end of the spectrum, fellow Dow member IBM (NYSE:IBM) juiced its dividend by 20% a year. Closer to the Dow's average dividend growth, United Technologies (NYSE:UTX) payouts have increased by 13% annually.

T Dividend Chart

T Dividend data by YCharts.

From this popular and often useful perspective, AT&T's dividend appears to be a total dud. It's trivially easy to find high-quality companies (aka Dow members) with drastically higher dividend growth rates.

But that doesn't necessarily make AT&T useless to income investors. You see, the telecom giant had a running start heading into this decade-long comparison.

Ten years ago, United Techologies shares came with a 1.4% effective dividend yield. IBM sat even further back, with a meager 0.8% yield. AT&T soared high above both, with shares yielding a 5.7% annual dividend payout.

In fact, neither IBM nor United Technologies have come close to AT&T's massive dividend yields in the last decade. It's not for a lack of effort, as the chart above shows. AT&T's head start was just that big.

T Dividend Yield (TTM) Chart

T Dividend Yield (TTM) data by YCharts.

How has this trade-off between slow dividend growth and high starting payouts worked out for AT&T investors? Quite well, I'd say.

Without dividends, AT&T shares have lagged far behind the Dow's returns in the decade-long period we're talking about. Not by a huge margin, historically speaking, but enough to make the difference felt in your portfolio:

^DJI Chart

^DJI data by YCharts.

But if you reinvested AT&T's payouts along the way, the story changes. From this angle, AT&T investors haven't lost out to the Dow for many years -- even if you ran the Dow through a DRIP plan, too:

^DJITR Chart

^DJITR data by YCharts.

So AT&T's large dividends have tripled investor returns over the last decade, and they make the difference between beating the market or not. IBM's generous dividend growth has only produced a 33% boost to Big Blue's plain share price returns. United Technologies provided 36% of its one-decade returns in the form of dividends.

That's not to say that AT&T is the perfect dividend stock. Reliable long-term payout growth is important, and Ma Bell's yields will eventually fall below many of its Dow peers unless the company makes a serious commitment to greater dividend boosts. Plus, past performance is no guarantee of future returns.

But keep this value-boosting payout in mind if looking for large-cap stocks with a solid dividend history. Warts and all, AT&T's big payouts have indeed helped its investors beat the market.

Anders Bylund has no position in any stocks mentioned. The Motley Fool owns shares of International Business Machines. Try any of our Foolish newsletter services free for 30 days.

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