The following commentary comes from an independent investor or market observer as part of TheStreet's guest contributor program, which is separate from the company's news coverage.

NEW YORK (

Trefis

) -- With a set of new product launches in addition to its strong product mix and pricing power, the

Altria Group

(MO) - Get Report

is well positioned to grow in the smokeless tobacco segment. Altria, previously named Philip Morris, is the parent company of Philip Morris U.S.A, John Middleton, United States Smokeless Tobacco, Philip Morris Capital Corporation and Chateau Ste. Michelle Wine Estates. It owns several leading cigarette and smokeless tobacco brands that include Marlboro, Copenhagen, Skoal and Black and Mild. Altria competes with

Reynolds American

(RAI)

and

Lorillard

(LO)

, two of its biggest competitors in the U.S.

We have a

$29.60 price estimate for Altria, which is about 15% ahead of the current market price.

Smokeless Tobacco: The Only Growing Tobacco Segment Smokeless tobacco is the only segment that has been growing for the company in the past several quarters. Altria's smokeless segment's revenue grew by 14% in 2010 and is expected to grow by 9% this year. The cigarettes segment, which currently contributes over 70% of tobacco sales in the U.S., is continuously seeing volume declines due to growing health consciousness among consumers, a ban on public smoking as well as high excise taxation on tobacco products and other legislative controls.

Smokeless products, however, have come up as an alternative to cigarettes. Not only can they be consumed in places where smoking is banned but are perceived by users as less harmful than traditional cigarettes. In addition, they are taxed less than cigarettes (less than 10% compared to more than 40% for cigarettes) for being perceived as products that help people quit smoking.

Major smokeless tobacco products include snuff and snus. Snus is a Swedish snuff similar to American snuff. The U.S. is a major market for smokeless tobacco products and is expected to grow at 7% in 2011-2012.

Altria Well-Positioned for Growth

Altria acquired the world's largest smokeless tobacco manufacturer, US Smokeless Tobacco Company (USSTC), as part of its 2009 UST acquisition. This helped significantly strengthen Altria's market share with leading brands like Copenhagen, Skoal and Red Seal. These brands occupy a market share exceeding 40% in terms of sales volume and 55% in terms of revenue.

The

smokeless tobacco division contributes approximately 15% to Altria's stock value. In 2010, Altria's smokeless tobacco segment grew in terms of market share and generated a 30% growth in operating income, led by its leading premium offerings of Copenhagen and Skoal.

After building the Copenhagen brand over the past few quarters and gradually growing its market share, the firm has now launched more than 15 new smokeless products in 2011, which include Skoal X-tra and Skoal Snus. These product variants are especially targeted to strengthen the Skoal portfolio, which should further raise Altria's market share in the smokeless tobacco segment.

See our

full analysis of Altria stock .

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This commentary comes from an independent investor or market observer as part of TheStreet guest contributor program. The views expressed are those of the author and do not necessarily represent the views of TheStreet or its management.