Altria HQ. Source: Altria.

Among popular dividend stocks, Altria Group (NYSE:MO) has stood out from the ground for its strong long-term returns and ever-growing payouts. Yet despite its positive performance, Altria still faces the prospect of declining cigarette volumes industrywide, and although it has thus far been able to offset those falling sales volumes by charging higher prices, some investors are skeptical about how long Altria can maintain its pricing power in light of the already-stretched wallets of its customers. Let's take a closer look at three of the problems that could hold Altria back in the future.

1. Altria's post-election bump could prove to be short-lived.

One of the positive catalysts for Altria stock recently came from the positive results in the 2014 midterm elections in early November. With the change of control in the Senate, both houses of Congress now stand united against the president, and some Altria investors believe that the stalemate will inevitably lead to greater gridlock on issues about which the two major parties disagree. Altria rose in part from the belief that lawmakers will be less likely to impose new restrictions on the tobacco industry, whether they're aimed at the traditional cigarette business or at new high-growth areas like electronic cigarettes and vapor products.

Source: Nikita2706 via Wikimedia Commons.

The problem with the election argument is that it was unlikely that negative legislation would have gotten through Congress even before the Senate joined the House of Representatives in electing a Republican majority. Moreover, with regulatory authority squarely within the ambit of the administration, Altria could see further regulation even over the potential objections of Congressional leaders. Given Altria's track record at surviving past legislative and regulatory efforts, shareholders shouldn't panic, but they also shouldn't automatically celebrate just because of the perception of a friendlier reception in Washington.

2. Altria's growth rates in its smokeless categories have been low.

For a long time, cigarette volumes have been on the decline, and growth-oriented investors have believed that products beyond what Altria calls its smokeable business line have better prospects for future gains in sales than cigarettes do. Until recently, that meant emphasizing its smokeless tobacco brands, which include giants like Copenhagen and Skoal. Unfortunately, smokeless tobacco sales haven't grown as quickly as they did in the past, with double-digit percentage gains in 2010 giving way to much slower rises over the past few years. In its most recent quarter, net revenues for smokeless products actually dropped 4% from year-ago levels, and over the past nine months, Altria's net sales after excluding excise taxes are up only half a percent from the first three quarters of 2013. Profits have fared better, thanks to Altria exercising its pricing power in that segment as well. Still, volume growth in Copenhagen got offset by declines from Skoal and other smokeless products.

Altria has made a big bet on the potential for electronic cigarettes and vapor products to become the next hot craze in the industry, boosting its MarkTen marketing to make a more dramatic entry into the U.S. market. Nevertheless, at present, revenue from electronic cigarettes and vapor products is tiny compared to what cigarettes and smokeless tobacco generate. That may change in time, but until it does, any growth from e-cigs might be insufficient to stem the tide if the adverse trend in smokeless tobacco sales continues.

Source: Altria.

3. Altria shareholders have started taking repurchases for granted.

For years, Altria avoided the trend toward greater stock buybacks, instead preferring outright dividend payments to its shareholders. Yet even as the company's share price has risen, Altria has finally caved in to pressure and started repurchasing stock as well.

Admittedly, the amount of money Altria has spent on share repurchases is relatively small. On a combined basis, competitors Reynolds American (NYSE:RAI) and Lorillard (UNKNOWN:LO.DL) have spent more than Altria has on buybacks in recent years. International peer Philip Morris International (NYSE:PM) has also used a much greater amount of its available cash flow for buybacks than Altria has. Yet with billion-dollar buybacks in 2011 and 2012 and with more than $900 million spent on share repurchases over the past 12 months, Altria has benefited from the positive impact on earnings per share that a reduction in share count brings. If anything causes Altria to reverse its spending on buybacks and use capital for other means, it could take away one of the props that have helped keep Altria shares moving higher.

In its defense, most of the potential pitfalls that Altria has to avoid have been around for a long time. Nevertheless, cautious investors need to be aware of the things that could trip up the stock in the long run in order to assess whether their risk profile justifies putting money into the stock at current levels. Some shareholders might reasonably decide that after such stellar performance, Altria is poised for a pause in its upward push.

Dan Caplinger and The Motley Fool have no position in any of the stocks mentioned. Try any of our Foolish newsletter services free for 30 days. We Fools don't 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.