With the S&P 500 trading at an average price-to-earnings (P/E) multiple of 35, company valuations might be becoming unhinged from fundamentals. And while there is no way to predict a stock market crash, now is a good time to bet on stable value stocks likely to maintain their profitability and dividends no matter what happens in the economy. Let's explore the reasons why tobacco giant Altria (MO 1.91%) and supermarket retailer Albertsons (ACI -0.54%) fit the bill. 

1. Altria 

With an annualized return of around 20% (including reinvested dividends) for nearly half a century, Altria is one of the best-performing stocks of all time -- and it still has some fight left. While the tobacco giant is still reeling from the effects of its disastrous investment in vaping start-up Juul Labs, it can continue returning value to shareholders with its unbeatable pricing power and dirt-cheap valuation. 

Stacks of U.S. currency notes.

Image source: Getty Images.

Altria's second-quarter net revenue jumped 8.9% to $6.9 billion on strength in its smokable products segment, which makes up 87% of its topline. While cigarette sales volumes are in secular decline, Altria can counteract this by raising prices as it transitions to more sustainable growth drivers such as reduced-risk products.

The company is building manufacturing capacity in oral tobacco through its subsidiary Helix, known for the On! brand of cigarette pouches, and rolling out heated tobacco products to retail stores across the southern United States.

Investors are also probably familiar with Altria's investments in Juul Labs, which has generated losses from equity investment (including $75 million in the second quarter) because of the regulatory challenges related to its marketing. But with the $12.8 billion stake impaired by 88% to just $1.6 billion, most of the downside looks priced in. 

Management expects full-year adjusted EPS of $4.56 to $4.62 in 2021, which would be up 4.5% to 6% against the prior year. Trading for just 10 times those projected earnings, Altria offers exceptional value -- its 7.15% dividend yield and 17 years of payout growth are icing on the cake.  

2. Albertsons 

Albertsons is an 82-year-old grocery store chain that went public in 2020 at $16 per share. It makes a compelling investment because of its pivot to e-commerce and relatively low valuation. With shares up 64% year to date, the market is noticing Albertsons' potential, so the stock may not stay this cheap for long. 

Albertsons is not a fast-growing company, and it will face challenging comps this year as pandemic-related tailwinds fade in the retail industry. Management expects identical store sales to decline by 5% to 6% ($65.8 billion at the midpoint) in 2021. But e-commerce is still growing at an impressive clip -- up 276% on a two-year stacked basis. Management has not provided specific guidance for its digital business, but CEO Vivek Sakaran believes digital engagement will continue to increase.  

Albertsons is investing in e-commerce by building more Drive Up and Go stations (DUGs), which are curbside pickup locations. DUG sales grew 75% in the first quarter, and the company expects to have 1,950 locations (98% coverage of the United States) by the end of the second quarter. The expansion is likely to help the company maintain its strong e-commerce growth rate in the post-pandemic economy. 

With full-year earnings expected at $2.20 to $2.30 in 2021, and a stock price of just $28, Albertsons boasts a cheap valuation of just 12.4 times sales. That's significantly lower than similar companies like Walmart or Target, which trade for 25 and 23 times forward earnings respectively. While Albertsons' slow brick-and-mortar growth rate is something to keep an eye on, its stable business and e-commerce pivot certainly look promising. 

Crash-proof companies?

Altria and Albertsons operate in defensive sectors (tobacco and consumer staples), making them exceptionally resilient to weakness in the economy. And with the delta variant driving a global surge in COVID-19 infections, no one knows what the coming months will look like from a macro perspective, so stability is crucial. Both stocks also boast cheap valuations, which is icing on the cake for investors.