One of the best performing stocks over the last decade is Altria formerly known as Phillip Morris or the cigarette company. The stock is up 228% versus the S&P 500 of 58%. If you add in dividends the gain rises to 455% and if you go back over 20 years the gain is 2,162%. It is hard not to own the company or have it as a significant portion in your portfolio.  In a recent article, David Berman examined the cigarette companies to see if they are still worth owning. There is the concern over cigarettes cause cancer; there is the concern that tobacco companies which essentially sell nicotine and it is addictive; but cigarettes are legal and people still smoke. The above combination is the ideal in business – people have brand loyalty and the continual purchase of cigarettes allows companies to raise prices on average 2 to 3% a year.

The competition of Altria is Reynolds American Inc which owns among over brands Camel the stock was risen 480% over 10 years. Reynolds recently bought Lorillard and BA Tobacco has offered $ 47 billion for the company.

Altria has raised its dividend 50 times over the past 47 years and currently distributes about 80% of its profit to shareholders. Since 2008 the company has doubled its quarterly dividend.

Linking to dividend paying stocks, if you just focus on results, owning cigarette companies where they make cigarettes for pennies and sell them for dollars; it is very hard not to own them. In investing there is always a philosophical considerations which is why in examining people’s portfolios you can generally tell where they are from or what business they are in (we tend to be local first). The companies are in the index funds, even if you do not own them directly, you will likely own the stocks indirectly, for proven performers you may want to own them directly.

There are more questions than answers, till the next time – to raising questions.