As the year marches to its end, Altria (NYSE:MO) investors have reason for good cheer. The company's stock is up more than 14% this year -- double the 7%-plus rise in the S&P 500 -- thanks mostly to recent corporate pronouncements indicating a renewed focus on shareholder value and an improving legal environment.

Shareholders were delighted when Altria's CEO, Louis Camilleri, announced plans to break Altria into two or three companies, pending -- you guessed it -- successful resolution of the major litigation facing the company. Tobacco investors have suffered the ups and downs of litigation for years, as greedy lawyers and government bureaucrats jealously grabbed for the cash generated by these highly profitable companies, but light is finally appearing at the tunnel's end.

The federal government's racketeering suit is tops on the list of cases staring Altria in the face. Filed under the RICO statute (put in place to prosecute organized crime), this suit lays claim to $289 billion of historic profits from Altria's Philip Morris, Reynolds American's (NYSE:RAI) RJ Reynolds, Loews Corp. (NYSE:LTR), Lorillard Tobacco (NYSE:CG), and others. That's a lot of smokes, even at today's prices. Fortunately for shareholders, a federal appeals court has questioned the government's claim to past profits, giving industry prospects a boost.

The other serious cases facing big tobacco are the Price/Miles case in Illinois and the Engle case in Florida, both class action suits. Engle has already been decertified, which the Florida Supreme Court is expected to uphold, and analysts expect Price to be decertified by the Illinois Supreme Court as well. Then there's the Minnesota "lights" case, which is another certified class action by smokers claiming they were deceived into thinking light cigarettes weren't as bad for them.

Yet behind all of this litigation looms the specter of the only ever successful tobacco money grab -- the Master Settlement with the U.S. states. This agreement, already five years old, guarantees another $187 billion over the next 20 years (including this year) to the 46 states that signed up. That's good coin, as the saying goes, and a key element to balancing many state budgets.

Which brings me to the same conclusion every time the viability of the tobacco industry is questioned: Practically every U.S. state (and by default the federal government) has a vested interest in big tobacco's survival. With this in mind, and the steadily improving legal environment, I'd say there are few investments safer than Altria right now. Despite the recent run-up in its share price, there's still tremendous upside to this stock.

Also attractive about Altria is its 4.79% dividend yield. Want the goods on other companies paying fat dividends? Take a free, no-obligation trial to Motley Fool Income Investor today.

Fool contributor Chris Mallon is an ex-smoker who thinks the anti-tobacco zealots are the ones blowing smoke. He owns shares of Altria.