Oct. 12--In the new world of big tobacco, Altria (NYSE: MO) seems to be marching to its own beat.

Reynolds American and Lorillard have joined forces to fight the government over increased tobacco regulation, questioning the free speech (i.e., advertising) ramifications of FDA control over the tobacco industry.

Meanwhile, Altria announced plans to expand its product portfolio with Copenhagen-brand wintergreen smokeless tobacco (it bought snuff-and-wine connoisseur UST last year). That could drive Copenhagen's share of the segment from 23 percent to 32 percent, according to a company spokesperson. Also, Altria is introducing a value-priced L&M menthol cigarette and continues to look for growth with its Marlboro Snus.

As Reynolds American and Lorillard battle for advertising supremacy, the lawsuits can hurt their bottom lines. The leading cigarette producers spent more than an estimated $13 billion on promotion in 2005 (the majority on discounts to retailers), but new advertising constraints could have costly effects.

Yet Altria comes out smelling more like a rose than a cigarette butt. It gets to support the new FDA legislation and maintain a relatively

decent public image. With a P/E ratio around 12 and a dividend yield above 7 percent, it may offer smoldering growth potential for investors in the short and long term.

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