Where did the value premium go? When the economy slows and the stock market tanks, modestly priced shares are supposed to outperform. After all, companies with low price/earnings ratios are already priced for paltry growth, and so should disappoint investors less as growth proves just that.

The downturn of December 1980 to July 1982 produced a sizable value premium. The sharp, short drop of September to November 1987 showed a small one. The dot-com plunge of September 2000 to September 2002 carried a giant one.

In the nasty decline that began November 2007, though, value stocks have performed miserably. The S&P 500/Citigroup Pure Growth index, which tracks only stocks with clear growth characteristics, has fallen 43% since then. Its value sibling is down 62%.

Perhaps as a result, expert bargain hunters have done worse than ordinary investors. Bill Miller beat the S&P 500 index in each of the 15 years ended 2005 as manager of the Legg Mason Value Trust (LMVTX) mutual fund. Last year the fund lost 55%, or 16 percentage points more than the index. Berkshire Hathaway (BRK.B) investment portfolio, overseen by Warren Buffett, bested the S&P 500 in 36 of 42 years ended 2007, producing double its compounded annual gain. Barron s speculates that, based on Berkshire s top 16 holdings as of September, it s tracking well behind the index this year.

Even stock-picking machines have disappointed. The FTSE RAFI 1000 Index, designed by Research Associates, weights companies according to book value, cash flow, sales and dividends not stock market value. Thus, it tends to favor less-expensive companies compared with the broad-market Russell 1000 index. Over the past decade it has beaten the index by three percentage points a year. Last year it underperformed by more than two percentage points.

A January post-mortem by Research Associates offers insight into the odd results. Separating stocks into 10 groups ranked by price/book ratios, a key separator of growth from value stocks, RA found the lowest price/book group, which included plenty of banks, lost 68.5%. When the outlook turns from recessionary to depressionary, RA concluded, the floor under cheap valuations caves in. Investors stop asking, What s the return on our money? and start asking, Will we ever see a return of our money? Companies in even slight distress sell off regardless of relative price. Some value stocks prices deviate wildly from their fundamentals.

If that s true, value stocks might sharply outperform growth stocks if the market stabilizes or rebounds. In the meantime, they ll provide more income; the cheapest quarter of S&P 500 companies by price/book ratio carry an average dividend yield of 5.2%, vs. 2.4% for the most expensive quarter.

Below are listed six S&P 500 members with low price/book ratios, generous dividend yields and manageable debt loads.