When it comes to dividend investing, AT&T (NYSE:T) is on many income investors' radars. And that makes sense: With a dividend yield of 5.2%, the stock nearly doubles the 10-year Treasury with its payouts. AT&T's stock has historically been a high-yielding investment. However, investors today find a vastly different company than the one they used to know.

AT&T started as a subsidiary of Bell Telephone -- named for legendary founder Alexander Graham Bell -- before buying out Bell in late 1899. The company operated as a monopoly for close to a century, until the U.S. government broke up the company in 1984 by requiring the company to spin off its regional subsidiaries into Regional Bell Operating Companies -- then termed "Baby Bells."

The product has also changed. What was initially a wireline operation has become mostly a wireless business. The company has ventured into other business lines -- with the DIRECTV (NYSE:DTV.DL) acquisition, AT&T is looking to become a larger presence in pay TV.

Here are two things about AT&T dividend investors need to know.

Own shares? We're about to water you down
The company is using shares to finance the bolt-on buyout of DIRECTV, and it appears this will involve diluting existing stockholders to the tune of nearly 900 million shares (as opposed to Verizon's recent use of debt to acquire full stake in its wireless business).

In addition, on a price-to-free cash flow basis, the company being acquired is actually more expensive than AT&T -- 23 times versus 17.15 over the prior 12 months. Investors would like to see lower numbers here because the company is paying for free cash flow that could go toward dividends, share repurchases, or debt. However, many companies reduce those costs by eliminating redundancy through so-called "synergies."

With that being said, more shares and lower cash flow could make it harder for the company to continue to raise its dividend. By growing the payout from $0.41 per share each quarter in 2009 to $0.46 in 2014, the company has provided solid but not flashy dividend growth of 2.3% per year.

Wireless is performing well, but wireline is withering
Among talk of the wireless wars and scrappy competition courtesy of T-Mobile CEO John Legere, so far AT&T has performed rather well in wireless. Wireless is the biggest part of AT&T's total operating income (60%), as well as the highest-growing segment (mainly through increased data fees). Wireless operating revenue has increased 5.1% per year since 2011.

However, increases there are being weighed on by wireline decreases. Total revenue in that division has actually fallen in the last two years as more households go mobile only. In the company's last fiscal year, the wireline business lost 13.4% in segment income on a year-over-year basis. The drop of $971 million counteracted the $1.3 billion increase in the wireless segment.

There is a silver lining in this, however. As wireless continues to form a larger part of segment income, the slow-growth, low-margin wireline business will matter less to investors. Right now, the wireless segment provides nearly three times as much income as wireline -- $17.8 billion versus $6.2 billion. The addition of DIRECTV would help offset the struggling wireline business as well.

Final thoughts
For dividend investors, AT&T is sort of a paradox. On one hand, the current dividend yield is outstanding. However, the last five years have seen many other companies be more generous with dividend increases. In addition, the purchase of DIRECTV has the potential to make it harder for the company to increase payouts in the future. The issue for income investors is current high payout versus dividend growth. AT&T fits the bill for the former more than the latter.

Jamal Carnette owns shares of Verizon Communications. 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.