Investors used to price companies according to the stuff they own. Three decades ago, the stock market value of America s 500 largest companies was only a smidgen higher than their "book value" -- what accountants figure those companies would get in an asset auction.

That changed. From 2004 through 2007, companies traded at an average of more than 280% of book value. That seemed to make sense. America s shift to an information economy, after all, had reduced the need for plants and equipment. Dell (DELL) was launched in a dorm room. EBay (EBAY) racked up huge sales while holding no inventory. Even a stalwart like Coca-Cola (KO) owes its profit more to intangibles like customer perception and distribution agreements than to the right balance of water and corn-sugar. As recently as 2004, Coke went for seven times book value -- a level analysts marveled was a 10-year low. Among companies trading at or near their book values at the time, many were financially distressed.

Today the entire market is financially distressed. But it s also becoming cheap once again relative to asset values. Among S&P 500 companies, the median now carries a price/book ratio of 1.5. That s important, because even through price/book might be out of fashion, there s reason to believe it s a powerful predictor of stock performance. In a landmark 1992 study by Eugene Fama and Kenneth French , P/B challenged a decades-old formula for determining a fair value for stocks, called the Capital Assets Pricing Model. The CAPM held that a stock s future performance is directly related to its risk, as measured by its trading volatility. French and Fama showed that low P/B stocks tend to beat the market even after adjusting for their risk. A 2000 study by University of Chicago professor Joseph Piotroski sought to separate winners from losers among low-P/B stocks. Piotroski showed that over 20 years ended 1996, an investor who selected the strongest low-P/B companies based on nine financial measures would have beaten the market by 13 percentage points a year.

Price/book isn t infallible, of course. In a long slump like the one we re in now, plenty of companies must write down their asset values, since former assumptions as to what they would fetch in a sale no longer hold. I recently argued that dividend yields are now a far more reliable measure than price/earnings ratios for investors hunting for bargains. They re not perfect, either. Dividend payments for S&P 500 companies are expected to drop 10% versus a year earlier. Among financials alone, 16 companies cut yearly payments in September and October by a total of $14.6 billion. Still, the combination of asset values and dividend payments, along with measures of financial strength, seems more reliable at a time when, for example, Intel (INTC) from one week to the next changes its mind on expected fourth-quarter sales by more than $1 billion.

I recently ran a search for companies with more book value than stock market value, dividend yields of at least 3% and ample free cash flow. Some of the names dredged up were in rough shape. There were car dealers seeing the worst sales slump in decades. Lower sales today leads to pent-up demand tomorrow, I suppose. But then, in Havana, 60-year-old Chevys make perfectly fine taxis. I can t help but think Americans can make do with their eight year-old Hondas for a while. The list also included newspapers, most of which I want no part of because of their unfair ownership structures. Last December I concluded that investors should pass on shares of Milwaukee publisher Journal Communications (JRN) despite a tempting valuation, because of its special voting privileges for employee-owned stock and its chief executive's dual role as board chairman. It turned up on this screen, too -- with an 80% lower stock price. Also, chicken-, cow- and pig-wrangler Tyson Foods (TSN) looks remarkably cheap but for America s anemic restaurant traffic and for a determination by Russia to reduce its chicken imports and for the sudden concern among analysts that Tyson will violate its debt covenants with lenders, as rival Pilgrim s Pride did last month. I ve long gobbled Whole Foods (WFMI) wares while pooh-poohing its stock for being too expensive. It suddenly looks reasonable, but management no longer feels confident about paying a dividend. I no longer feel confident recommending stocks without one.

But there are worthy names among the wreckage. I ve listed a handful on the table below. J.C. Penney (JCP) cut its dividend by more than half in 2000, but has increased payments in recent years and now carries a meaty yield. A week ago I noted that Eastman Kodak (EK) was approaching a suitably ugly price of 25 cents on the dollar for the assets it owns free and clear, plus 10 years' worth of dividends. It s below that price now. Northrop Grumman (NOC) is still expected to grow earnings this year and next -- an outlook that seems suspiciously rosy. But at least it has an order backlog equal to double this year s sales. To create your own list, have a look at SmartMoney s stock screener.