LONDON -- Any company that has increased its dividend continuously for 28 years, and offers a FTSE-beating yield of 4.1%, deserves to be taken seriously.

And when you add in annual sales nearly three times that of its closest London-listed competitor, and a leading presence in the home-delivery market, then things look even better.

I am, of course, talking about Tesco (LSE:TSCO) (OTC:TSCDY), a share I hold in my own ISA, and one that I think is perfect for this tax-efficient method of saving.

You can find out more about the tax benefits of investing through an ISA here. Let's now take a look at the particular attractions of Tesco.

Would you bet against Buffett?
Tesco's size and U.K. market dominance are undoubtedly two of the company's strengths, as is its unbroken 28-year record of dividend increases.

When Tesco issued a profit warning in January 2012, billionaire investor Warren Buffett used the share-price dip as a buying opportunity, and topped up his Tesco shareholding, to give him 5% of the company.

Today, Buffett's Tesco shares are worth around £1.5bn, and will provide him a dividend income of about £60m this year.

Although Tesco's share price has risen recently, it still looks like a good value to me, placing the company on a forward price-to-earnings ratio (P/E) of 11.3, well below the FTSE 100 average of 16.6.

Beneath the bonnet
When you look a little more closely at Tesco's financials, things still look good. Tesco's operating margin of 6.2% is higher than both that of J Sainsbury (3.9%), and Wm Morrison Supermarkets (5.5%).

What's more, despite being the biggest of these three, Tesco is also expected to deliver the most growth this year. Analysts' forecasts suggest Tesco's earnings per share will grow by 5.7% in 2013, compared with 4.8% for Sainsbury's, and a stagnant 0.4% for Morrisons.

Never knowingly undersold?
Finally, a recent report in the Financial Times suggested that Tesco is about to launch a new price-matching scheme, which will issue customers with money-off vouchers at the till if their shopping would have been cheaper at Morrisons, Sainsbury's, or Asda.

It rarely pays to bet against a giant, and I believe that Tesco will overcome its short-term problems, and will continue to pay a rising stream of tax-free dividends into my ISA for many years to come.

2013's top ISA income stock?
If you like the idea of using an ISA to hold high-yielding income shares, then I would recommend you take a look at The Motley Fool's latest free report, "The Fool's Top ISA Income Stock For 2013".

The company in question currently offers a yield of 5.7%, and the Fool's expert analysts believe that the current price of 700p could be 20% below the share's true value. To learn more, just click here to download your free copy of this special report, while it remains available.