Update (20 March 2026): I first wrote this article on 13 August 2024 when this stock yielded 7.8% dividends. While Altria Group’s shares and yield have changed, why I still invest for dividends remains the same. If anything, it’s even stronger today and here’s why.
What’s the best performing stock of all time? And no, it isn’t Berkshire Hathaway, Amazon, or Nvidia, or a “high-tech” growth stock. (give you a hint: it’s a dividend stock).
In fact, who would have known the best performing stock is a traditional, dividend grower called Altria Group. Its shares have produced 265,528,901% returns over the last 100 years.
From the mid 1920s till 2023, investing $1,000 in shares of Altria Group would have returned over $2.6 billion today. That’s at least a 16% compounded annual return. Not too bad. Not too bad.
By the way, even Berkshire Hathaway returned about 3,787,464% during its life-time since 1965, after Warren Buffett took control of the company.
Sure, it’s easy to say all these in hindsight. What’s more interesting is the lessons to be had. The thing is, much of Altria Group’s performance actually came from its dividends.
I’ve also shared this on MoneyFM89.3 some time back…
This dividend grower is a solid compounder
It’s funny because not many investors would have expected a traditional dividend payer to compound such huge returns over the years.
Altria Group is a tobacco giant with a market cap of $85 billion. Its Marlboro brand is the leading cigarette brand. The company commands ~40% market share in the US.
Altria Group also owns an 8% interest in Anheuser-Busch InBev, the largest brewer in the world. What’s interesting is that the share performance of Altria Group wasn’t an overnight success.
Over the last ten years, Altria Group continued to produce a steady stream of revenues at US$20 billion per year. Over that same period, it gushed free cash flow, growing from US$3.6 billion to US$9 billion. Not too bad.
Despite struggles with its vaping business, Juuls, what stood out was Altria Group’s high net profit margins. Its 10-year average gross profit margin and net profit margins were 66% and 34% respectively.
That’s nearly twice as big as the average US companies’ profitability.
What’s crucial here is, the company can achieve such high profit margins over the years – whether economies were hit with higher interest rates, or inflation scares.
Just by looking at these numbers, I’d expect dividends to be consistent. Since 2016, Altria Group has grown its dividends from US$2.35 per share to US$4.16 per share in 2025.
In fact, Altria’s strong business model has allowed it to gush dividends consecutively over the last 55 years – making Altria a solid Dividend King.
Investing in Altria Group has rewarded shareholders with regular, growing dividends over the years. What mattered to investors was this: endurance. And that’s how solid dividend growers and payers reward shareholders.
Why dividend investing works
According to Ned Davis Research, shares of dividend growers and payers have massively outperformed average stocks that don’t pay dividends.
Put it this way, if you’re willing to be patient and disciplined, you’d have a far higher chance to beat the stock market, and consistently accumulate your wealth over the long term.
Disclaimer: I own Altria Group. And I’ve been a dividend investor for a long, long time.
Look: one big reason Altria continued to outperform shares of its peers like tech stocks, or even Berkshire Hathaway was its regular dividend payout – whether the stock market was up or down. This contributes to its overall returns.
One key thing is compounding. It has been a consistent dividend payer. This steady stream of income allows investors to reinvest dividends back into Altria’s shares.
The more Altria shares they own, the more dividends they collect, and the flywheel continues.
Over time, this snowball effect grows bigger and bigger, which allows returns to compound.
Are there other solid dividend payers out there?
According to Bessembinder’s research, there are 80 stocks that have achieved over 500,000% returns in their lifetime.
These are your traditional, mature companies like Johnson & Johnson that returned 5,427,968%, Coca-Cola that returned 12,372,265% and Hershey Co that returned 6,909,822% over the last 80+ years.
One quick glance showed these companies have some common traits: a strong business model with a durable competitive advantage, growing revenues and earnings and more importantly, many of them pay dividends.
Note: a company that consistently pays dividends is a sign of business excellence.
These companies continued to deliver consistent profits and free cash flow, like Altria Group. They controlled their debt, so they don’t get into trouble during a financial crisis.
My Final Thoughts – Look for Consistent Dividend Payers
This is one big reason why I invest for dividends.
At first, it doesn’t seem like much, but over time, this is a powerful reminder that compounding long-term allows a disciplined investor to accumulate wealth over time – whether the economy is in a recession or not.
Altria Group has grown dividends over the last 55 years, despite volatility in interest rates, thriving beyond economic recessions.
Not many stocks can produce good returns. But if you invest in dividend stocks, this would far increase the chance of you picking a winner over the long-term.
After all, investing is also a game of probability.
