The Best Investment - Ever

Have you ever wondered what the best share market investment of all time is?

It’s not Apple, the world’s first trillion-dollar business. It’s not Meta Platforms Inc (the company formerly known as Facebook) either, although plenty of people who ‘liked’ Facebook enough in the early days to invest in it have become millionaires. You may never have heard the name of the best investment of all time, although you certainly know about its products. You may even be a customer.

If you judge it on recent performance, you wouldn’t be too impressed. Over the last five years, it’s dropped by nearly 10 per cent. Sticking to a US index fund would have grown your money by more than 60 per cent. It looks like a classic value stock – it’s trading on a price/earnings ratio of 9.8 per cent, and paying a 9 per cent dividend yield. But look at the long-term returns, and you get a very different picture.

If you could go back in time to 1920 when Altria listed and invest $1,000, today you’d be sitting on an investment worth more than $200 million.

Okay, it’s hard to grasp the idea of holding an investment for over a century, so let’s look at some shorter periods.

Since 1972, Altria’s share price (with dividends reinvested) has risen 531,782 per cent. Your $1,000 investment would now be worth a handy $5.3 million. And that’s despite the fact Altria’s market has been declining in the US and Australia for over 50 years. Twenty years? Since 2012, Altria has returned 1,365 per cent. In other words, your investment is now 13 times the original.

Even over the volatile last decade, Altria’s scratched out a return of nearly 150 per cent. For a local reference, that’s on par with the Commonwealth Bank, and around twice the return of ANZ, Westpac or Telstra.

Altria is a cigarette company. Its brands include Marlboro and Benson & Hedges. Altria manufactures around half the cigarettes sold in the US each year. Not many Australians light up these days – only around one in ten confess to being regular smokers.

That’s a far cry from the post-war years, when over 70 per cent of Aussie men, and 26 per cent of women were daily smokers.


The smoking rate is continuing to decline in Australia, thanks to ongoing awareness campaigns highlighting the health risks, and a taxation regime that’s pushed the price of cigarettes above $50 for a pack of 25.

But globally, Altria’s market is huge. Population growth, particularly in developing countries, means Altria is supplying a bigger market. Around 1.2 billion people are now smokers. Most investors would probably choose to shun Altria, and would be suspicious about the company’s claim that it’s “leading the way in moving adult smokers away from cigarettes by taking action to transition millions to potentially less harmful choices”.

Those other choices include chewing tobacco and snuff (provide by Altria subsidiary US Smokeless Tobacco Co), nicotine pouches (sold by Altria’s Helix Innovations) and vaping products (from Altria’s investment in JUUL).


The company has also moved to diversify the business, with investments in Annheuser-Busch, the world’s largest brewer, and a 45 per cent stake in cannabis company Cronos Group.

It seems extremely unlikely Altria will be the best-performing company over the next century and beyond. But those who write the business off because they believe the end of smoking is imminent might well be surprised.