Although we don't believe in timing the market or panicking over market movements, we do like to keep an eye on big changes -- just in case they're material to our investing thesis.

What: Shares of cigarette maker Lorillard (NYSE: LO) were smoking hot today, gaining as much as 13% in intraday trading after the company reported fourth-quarter results.

So what: Smashing the stereotype of high-yielding dividend stocks as boring plodders, Lorillard gave its shares the fuel to rocket higher when it reported adjusted earnings per share of $2.20, up 26% from last year. The profit growth came as quarterly sales registered YOY growth of 8.9%, to $1.6 billion. Wall Street analysts had expected the company to earn $1.95 per share on $1.08 billion in revenue.

Oh, and as to those dividends? They weren't left out of the fourth-quarter excitement. Lorillard announced that it's boosting its quarterly payout by 19%.

Now what: Lorillard's results are rightly being cheered by investors, but there are still some significant clouds still on the horizon for the company. Through its Newport brand, the company is the leading seller of menthol cigarettes in the U.S. While that has helped the company carve out a nice market position, it's putting it in an awkward spot as regulators consider new controls on menthol smokes.

Combine that concern with the historically high valuation that shares have garnered thanks to investors' recent infatuation with dividends, and even the company's strong earnings report leaves me a bit lukewarm on the stock.

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This article represents the opinion of the writer, who may disagree with the “official” recommendation position of a Motley Fool premium advisory service. We’re motley! Questioning an investing thesis -- even one of our own -- helps us all think critically about investing and make decisions that help us become smarter, happier, and richer.