Interest rate hikes initiated on multiple occasions this year have yet to get inflation in the U.S. under control. This is evidenced by the fact that the inflation rate accelerated from 8.6% year over year in May to 9.1% in June. 

This continued inflation growth is a big contributor to many investors shying away from growth stocks in 2022. The Nasdaq Composite which has more than its fair share of growth stocks has tumbled roughly 25% year to date. Those investors are instead focusing their available cash on value stocks, which have performed far better overall so far this year. 

Let's take a closer look at two value stocks that have faired much better than the broader market so far this year. Yet, despite their strong performance, these two stocks remain affordable at less than $100 a share and cheap when accounting for their earnings capacity.

Two people doing bills at home.

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1. British American Tobacco

With a market capitalization nearing $95 billion, British American Tobacco (BTI 1.24%) is the second-largest tobacco company in the world behind only Philip Morris International ($140 billion market cap). 

It has an impressive portfolio of products, including combustible brands like Camel and Newport and new category brands like soon-to-be leading e-cigarette brand Vuse and nicotine pouch brand Velo. British American Tobacco's new category brands doubled revenue from 2018 to 2021 and accounted for 12% of its total revenue in 2021. Its consumers of non-combustible products doubled to 18 million during that time. 

Similar to its tobacco peers, British American Tobacco has pricing power with its combustible brands. As cigarette volumes continue to decline, the company's revenue should be driven higher by price hikes and volume increases in its non-combustible products. This explains why analysts are predicting that the tobacco company will deliver 8.9% annual earnings growth over the next five years. 

British American Tobacco pays a steady dividend that currently yields a whopping 7.1%, which is more than quadruple the S&P 500 index's 1.7% yield. With the dividend payout ratio expected to be 61% over the next four quarters, the company's dividend is quite safe moving forward. 

This passive income has helped maintain interest in the stock, which is up nearly 13% year to date. And at the current share price around $42, British American Tobacco is trading at a forward price-to-earnings (P/E) ratio of just 9.4. 

2. Leggett & Platt

Leggett & Platt (LEG) is a leading manufacturer of a variety of products, including mattress springs, automotive seats, home and work furniture, and flooring products. 

It has lots of opportunities for growth in its addressable markets through increased market share and acquisitions and that has led analysts to project that Leggett & Platt will record 5.2% annual earnings growth over the next five years. This is impressive growth considering that it takes into account the expectation of a recession in 2022. 

Leggett & Platt also pays a dividend that has an appetizing 4.7% yield. And with the dividend payout ratio set to be 64% in 2022, this unofficial Dividend King should have no issue extending its 51-year dividend growth streak. 

Leggett & Platt's appeal to yield-oriented investors is probably why the stock is only down 8% this year. At the current $37 share price, the stock is trading at a forward P/E ratio of 14. This is moderately lower than the S&P 500 index's forward P/E ratio of 16.1. As a result of its mix of yield, growth, and sensible valuation, I would be surprised if Leggett & Platt didn't generate low-double-digit annual total returns for investors in the years ahead.