Source: Wikimedia Commons.

You know about socially responsible investing, or SRI, in which investors steer clear on principle of certain industries -- for example, guns, alcohol, tobacco, gambling, military equipment, and prisons -- objecting to how companies in those businesses make their money. But have you thought of investing in these industries on purpose, and adding a sin stock or two to your portfolio? If so, you might want to consider the domestic tobacco titan Altria Group Inc (NYSE:MO).

It's not such a crazy idea, as long as your values permit it. The USA Mutuals Barrier Investor (VICEX) mutual fund, for example, focuses its assets solely on "sin" stocks and has outperformed the S&P 500 over the past five and 10 years (though it lags it a bit over the past three). Altria Group was recently its second-largest holding.

Source: Altria Group.

Why might you buy Altria Group Inc.?

There are lots of reasons to consider adding Altria Group to your portfolio. Consider its past performance, for example, with its stock averaging annual growth of 20% over the past 30 years (and 33% over the past year). That's more than twice the growth rate of the S&P 500 over the same period. (It averaged 8.6%.)  Such a growth rate would turn a small one-time investment of $1,000 into more than $237,000 over 30 years.

The company, which spun off Philip Morris International in 2008 to focus on international tobacco sales, has been focused on America in recent years, with a brand portfolio that includes Marlboro, Chesterfield, Benson & Hedges, L&M, Lark, Merit, Parliament, Virginia Slims, Black & Mild, Skoal, Copenhagen, Red Seal, MarkTen, and Green Smoke -- among many others. In 2013, Altria's U.S. cigarette retail market share was just over 50%.

Altria also owns all of Philip Morris USA, the U.S. Smokeless Tobacco Company, and the Ste. Michelle Wines Estates, among other businesses, along with an economic interest (of nearly 30%) in beer and soft-drink maker SABMiller plc. Diversification can be a good thing for a business, and Altria's beer and wine income is growing more briskly than its cigarette income. (Some have suggested that Altria would do well to boost its alcohol operations by buying another alcohol company, such as Constellation Brands, though there's also speculation that SABMiller might get bought out, creating a huge windfall for Altria.)

The company's business model is hard to beat. As Warren Buffett explained back in 1987:

I'll tell you why I like the cigarette business. It costs a penny to make. Sell it for a dollar. It's addictive. And there's fantastic brand loyalty.

Conditions have changed in the past 27 years, but the company still enjoys massive profit margins, with its net margin recently topping 24%. Tobacco remains addictive, and that's not hyperbole. With the average price of a pack of cigarettes costing between $5.25 and $12.85 in our 50 states, millions are still buying pack after pack, even though it often costs them thousands of dollars per year.

Source: Green Smoke.

Great investments need to keep growing to stay great, though, and while the smoking rate in America has been dropping, which is not auspicious for Altria, electronic cigarettes have been growing in popularity. And although Altria was a bit late to the e-cig party, it does now sport some brands in that arena, through its MarkTen and Green Smoke acquisitions.

Then there's the company's very significant dividend, which recently yielded 4.4%, far more than you can get from most or all bank accounts or CDs or government bonds these days. The dividend has gone up and down a bit in the past decade, because of spinoffs, but it has essentially been growing for quite a while and has been raised by an annual average of 8% since 2008.

Why might you steer clear of Altria Group Inc?

Of course, not everything is rosy for Altria. It's focused on domestic tobacco sales, in a nation where cigarette volume is falling as more people quit or never start smoking. Increased taxes and regulations are boosting the prices of cigarettes out of some people's reach (while companies such as Altria also raise prices to offset drops in volume).

Competition is another concern, heightened recently by the upcoming merger between the No. 2 and No. 3 cigarette companies, Reynolds American and Lorillard.

In all, Altria has a lot to offer, if you don't object to its chief line of business (or its secondary, also-sinful-to-some, business). The company is aiming to grow its bottom line by about 7% to 9% annually, and to spend most of its earnings rewarding shareholders with dividends. It may not grow as briskly as it did in the past, but it's a portfolio contender.