Is the market getting frothy? With some of the valuations for sexier stocks looking a little bit stretched, 7investing Lead Advisor Matthew Cochrane sat down with Lawrence Hamtil, a co-founder of Fortune Financial Advisors, to look at some companies with durable economic moats in industries that might be overlooked by most investors, including tobacco and defense.

Their conversation begins, however, with a comparison between valuation metrics of the U.S. stock market and international markets. Hamtil explains that while international markets often look cheaper at first glance, that once other factors such as sector allocation are taken into account, most of the gap in valuation can be justified.

Defense companies such as Lockheed Martin (NYSE:LMT), Northrop Grumman (NYSE:NOC), and General Dynamics (NYSE:GD), feature several moats unique to the industry. The industry supports several oligopolistic characteristics, Hamtil explains, as the U.S. government would only reluctantly seek militarized weapons deals from international corporations and companies must clear several regulatory hurdles before being approved for large multibillion-dollar deals.

While the tobacco industry is frowned upon by many in the investment world, Hamtil looks at it a bit differently, reasoning that the tobacco companies don’t need investor money and return most money to shareholders. Shareholders can then put that money to use however they best see fit. With tobacco companies sporting cheap valuations and high dividend yields, Hamtil believes that many investors’ portfolios would benefit by considering the companies for inclusion.

Hamtil can be found on Twitter with his handle @lhamtil and blogs at Fortune Financial Advisors.