I get frustrated when commentators point to a company and say, "Look, if you bought this stock 50 years ago, you'd be rich!" It's not just frustrating. It's often pointless.

But I'm going to do it anyway with Altria (NYSE: MO). The returns are spectacular enough, and there are great lessons from its success that'll hopefully make it worth your time.

If you bought Altria (Philip Morris in another lifetime) in 1970 and reinvested all dividends, you would have made 155,300% on your investment. That's simply incredible. An investment in Warren Buffett's Berkshire Hathaway (NYSE: BRK-A)(NYSE: BRK-B) compounded assets during the same period by 190,000% -- better than Altria, but annualized, it's not a major difference. A similar dividend-adjusted investment in the S&P 500 would have returned roughly 4,500%.

What's incredible about this is that Altria's success hasn't been on the back of anything close to innovation. Early investments in Microsoft (Nasdaq: MSFT) or Wal-Mart (NYSE: WMT) offered better returns for many years, but they achieved success either with life-changing technology or rapid-fire business growth. Altria makes roughly the same product it did over a hundred years ago, and smoking rates have actually been declining for decades.

So what explains Altria's incredible success? I think you can narrow it down to three points.

1. Really simple business
Evolution can be dangerous. How many technology companies that were huge in the '70s and '80s are still around today, let along dominant? Very few. Competition is ruthless. That dynamic makes technology investing really exciting, but can turn great companies into losers really quick.

Altria, and the cigarette industry in general, bypasses a lot of that risk. Grow tobacco. Roll. Sell. That's about it. It's how the industry operated 100 years ago, and I'm willing to bet it's how it'll operate 100 years from now.

The benefits of this are that (1) R&D expenses are kept at a minimum, and (2) you get really, really good at what you do. A company like Apple (Nasdaq: AAPL) that launches new products at least once a year has to organize new contractors, hire new engineers, develop new best practices, and constantly reshuffle its business to remain competitive. Each one of those steps is an invitation to screw up. By producing the same product today as it did decades ago, Altria gets to figure out how to operate as efficiently as possible, and that efficiency remains mostly permanent because its business doesn't change. It's specialization at its finest.

2. Allocation of capital
It's difficult to invest a ton of money in the cigarette business for the same reason described above: The industry doesn't change much. There's no innovation. Altria chugs out a ton of cash, and there isn't much management can do with that cash other than give it back to shareholders. So that's exactly what they do. Huge dividend payouts have been Altria's staple.

That brings me to the third point.

3. Consistently cheap share price
What seems like Altria's greatest fault is one of its secret weapons: Its share price has consistently remained in the dumps. Since the early '90s, shares have traded at an average P/E ratio of less than 12. That's pitiful.

There are a few reasons for this. One, the company isn't a fast-grower. Two, it's a "sin" stock, causing many investors to steer clear. Three, it's been under constant litigation threat, giving investors reason for caution.

But how has that benefited shareholders?

The consistently cheap stock price has made reinvesting dividends a bonanza. Simple math here: Cheap valuation equals high dividend yield. High yield equals lots of shares acquired upon reinvestment. More shares equal more dividends. More dividends equal more shares. Around and around you go. If you look at Altria's performance since 1970, non-dividend-adjusted returns are roughly 6,600%. That ain't bad, but it's a tiny fraction of the 155,000% return received when dividends are reinvested.

You've surely heard the maxim that "low valuations lead to superior long-term returns." Altria is probably the greatest example history provides.

Boring, simple business. Great capital allocation. Cheap valuations. These are three really basic concepts that have made Altria one of the best investments to own over the long term. I'm confident it'll continue to be the same for years to come.