Value stocks are generally shares in companies that trade at low valuations compared to their earnings and growth potential. With the S&P 500 trading at an eyewatering average price-to-earnings (P/E) ratio of 37, these stocks can be an ideal alternative for investors who want more bang for their buck.

Let's explore the reasons why Altria (NYSE:MO) and Dollar General (NYSE:DG) are two top value stocks to consider buying right now. 

1. Altria 

With a P/E multiple of just 10 based on adjusted earnings per share (EPS) of $4.38, Altria is one of the more modestly valued large-cap stocks in the market. Shares in the tobacco giant took a hit after its failing investment in vaping start-up JUUL Labs, which is being hit with a regulatory backlash over its marketing strategy and potential health risks. But Altria is still a good option for value-oriented investors because of its consistent earnings growth and massive dividend.

American money in a jar

Image source: Getty Images.

Trading for around $43 per share, Altria's stock price is down by roughly 8% year to date. But most of the downside from the company's JUUL investment seems to already be baked into the stock price because management has written down around 88% of its initial $12.8 billion stake as of the third quarter (the equity is now worth $1.6 billion). 

Altria is counteracting the long-term decline in tobacco sales volume with aggressive price hikes. And over the long term, it plans to pivot to reduced-risk heated tobacco products such as IQOS. Net revenue increased by 3.9% to $7.1 billion in the third quarter, with traditional smokable products making up 89% of sales. Adjusted earnings per share (EPS) remained flat at $1.19. 

Management expects an adjusted EPS of $4.30 to $4.38 for the full-year of 2020 -- a respectable growth rate of 2% to 4% from the previous year. Altria is committed to returning the majority of its profits to investors through its per-share dividend of $3.44 annually -- a jaw-dropping yield of 7.86%.

2. Dollar General 

Dollar General is a discount retailer that focuses on consumer goods like cleaning products and packaged foods. The stock has performed well in 2020, with shares up 36% year to date, and it enjoys continued tailwinds from its consumer staple business model and robust top-line growth. 

The economy is still reeling from the coronavirus pandemic, with the November unemployment rate standing at 6.7%, according to the Bureau of Labor Statistics (BLS). The challenging economic environment could boost demand for discount retailers like Dollar General that focus on lower-income consumers. Third-quarter revenue grew 17.3% to $8.2 billion, with same-store sales increasing by 12.2% in the period.

Management believes consumer behavior driven by COVID-19 had a "significant positive effect on net sales and same-store sales" in the third quarter. And the company's bottom line also enjoyed a boost, with operating profit jumping by 57.3% to $773.1 million partly because of lower markdowns and a more favorable sales mix tilted toward non-consumable products. 

With a P/E multiple of 21, Dollar General has a significantly higher valuation than deep value stocks like Altria. But the company's multiple is still much lower than the market average of 37 and looks like a good value considering its respectable top- and bottom-line growth. 

More bang for your buck 

Altria and Dollar General are both great picks for investors who want the most bang for their buck -- especially with overall market valuations getting pricey. Altria is better for investors who prioritize a large dividend payment and a rock-bottom P/E multiple. Dollar General is better for those who are willing to pay more for faster growth. 

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.