In the competitive spirit of college basketball's annual championship tournament, The Motley Fool brings you Stock Madness 2007! Our writers are making head-to-head arguments for their chosen stocks (but not necessarily investment recommendations -- this is, after all, a game), and you'll pick the winners with your article recommendations and Motley Fool CAPS ratings. Who will win the right to cut down the net? Let's tip things off and find out!

As the third round begins, it's a new game for Altria (NYSE:MO).

Until now, Team MO has been playing hard against mega-cap competition, prevailing over Coca-Cola (NYSE:KO) and AT&T (NYSE:T). Meanwhile, Chesapeake Energy (NYSE:CHK) has been the Cinderella story of the tournament, overcoming Microsoft (NASDAQ:MSFT) and Citigroup (NYSE:C) despite having a market cap of just $14 billion. Everyone loves an underdog, so Altria finds itself up against a crowd favorite for the first time.

None of the eight remaining companies in Stock Madness is a slouch. There's no question that Chesapeake Energy has some great things going for it. As a player in the hot energy sector, its stock has given exceptional returns to its investors over the past several years. If energy prices continue their trend up, then shareholders will continue to benefit. Heck, that's why I'm one of them.

But if you forced me to pick one company or the other, I'd go with MO in a heartbeat. For me, it all comes down to how the company treats its shareholders.

Unlocking the treasure chest
Altria is doing everything right for its shareholders. The coming spinoff of Kraft (NYSE:KFT) lets investors pick whether or not to concentrate on tobacco or stay with the diversification of Kraft's food business. The dividend -- now at a rich 4% -- has been a mainstay of the stock for decades and should rise again after the spinoff. Over the years, Altria has done sizable stock-repurchase programs, especially during temporary drops in its share price. Long-term investors have been able to feel comfortable that Altria is serving their best interests.

On the other hand, Chesapeake Energy hasn't always been its shareholders' best friend. It has a history of making public offerings of shares, diluting the interest of existing shareholders. For instance, in 2004, the company sold 23 million shares of its stock for just $13.50 per share. In 2005, it sold another 8 million shares. The company has also used convertible notes for its debt financing, which will dilute equity holders. While the company is still growing, these corporate offerings have to make you wonder: If the stock price is primed to rise, why has Chesapeake consistently sold shares, both in good times and in bad?

When you buy a stock, you're putting your trust in company management. Without trustworthy executives, a highly profitable business doesn't always translate into big returns for shareholders. Year in and year out, Altria has both made big money and defended the interest of shareholders, and long-term investors have seen that dedication reflected in their portfolio value.

Send Big MO to the Final Four by following this link to Motley Fool CAPS and ranking the stock outperform. If you think natural gas burns brighter than tobacco, give it an underperform. Later this week, we'll count up your votes to determine which stocks will advance one step closer to the title.

Read our opposing article on Chesapeake Energy, or see all of the other entries in this tournament.

Think you could pitch your favorite stock -- or ditch your least favorite one -- in less than 27 seconds? That's what we're doing over at Motley Fool CAPS. Check out our new stock videos.

Fool contributor Dan Caplinger owns shares of Altria and Chesapeake Energy. Chesapeake, Microsoft, and Coca-Cola are Inside Value picks. Kraft is an Income Investor choice, and AT&T used to be a Stock Advisor pick. The Fool's disclosure policy is never maddening.