Sure, Europe's markets are in turmoil. But bargains are beginning to beckon. To find them, look for companies with European headquarters but global operations.

Markets across the continent have plunged in recent months over fears that heavy debtors, especially Greece but also Portugal, Italy and Ireland, will throw the euro zone into crisis much the same way strained banks did the U.S. in 2008. The MSCI Europe index has fallen 27% in three months, versus a 14% decline for the MSCI U.S. index.

That has left European shares looking cheap relative to fundamental measures of value. The MSCI Europe index trades at 11 times trailing earnings and carries a 4.1% dividend yield, versus a price/earnings ratio of 14 and a dividend yield of 2.1% for its U.S. counterpart.

Of course, some European companies, notably banks, come with big risks. They hold more than $100 billion in exposure to Greece alone through bonds and derivatives, according to estimates by UBS (UBS) and the Bank for International Settlements.

But strategists say there are opportunities in the telecom, technology, energy, consumer-staples and drug sectors among companies with solid balance sheets, plenty of cash flow and strong dividends.

"Investors might be overstating the macro and understating the micro," says Gary Motyl, chief investment officer of Templeton Global Equity Group. "There have been sharp declines even among global operators that have the financial flexibility to insulate themselves."

Consider Spain's Telefonica (TEF), which last quarter collected 46% of its sales from Latin America. It is one of Mr. Motyl's favorites in part because it sells for eight times this year's earnings forecast, much less than the MSCI Europe index. This year's dividend payments are expected to top 12% of the stock's recent price, according to FactSet data. Dividends consume the bulk of earnings, so a profit hit could hurt payments but the company earlier this year announced an unusual "minimum annual shareholder remuneration" target of 1.75 euros a share, including dividends and share repurchases, next year and beyond. That is 12.7% of the stock's recent price.

Sweden's Telefon AB L.M. Ericsson (ERIC), a maker of wireless equipment, generates more than three-quarters of its sales from outside Europe. Ericsson makes money as carriers build new networks, upgrade to speedier service or hire the company to manage their networks. It sells for just under 11 times this year's earnings forecast, and expected 2011 dividends are 3.7% of the current stock price, according to FactSet data.

Mr. Motyl also recommends Swiss drug maker Roche Holding (ROG.VX), which specializes in medicines for cancer and arthritis and diagnostic equipment for HIV and diabetes. Europe contributed just 35% of its sales last year. The stock sells for 11 times forecasted 2011 earnings and Roche is expected to pay 4.9% of its stock price as dividends this year.

Investors who shop Europe for stocks should use recession tactics, wrote Gary Baker, chief European equity strategist at Bank of America Merrill Lynch, in a client note on Wednesday. According to back-testing of economic cycles and stock returns since 1992, it is a good time to move out of growth stocks (ones with rapid past and expected earnings increases) and into value stocks (ones with modest prices relative to earnings, dividends and other measures of value), because economic indicators including gross-domestic-product forecasts and business surveys are deteriorating.

Mr. Baker points to British American Tobacco (BTI), the second-largest traded tobacco firm behind Altria, for its stable earnings and dividends. Shares are nearly 14 times earnings but this year's expected dividends make for a yield of 4.7%. The company has less sales exposure to Europe than to Asia and the Americas, excluding the U.S., where it participates through a 43% stake in Reynolds American (RAI) .

Total (TOT), a French oil-and-gas producer, has trailed peers since early last year because of limited production growth, poor margins and a string of large investments in oil-sands and liquid-natural-gas development, according to analyst Iain Reid of Jefferies & Co. But the profitability of these new operations is double that of Total's base business, and earnings should grow faster than Wall Street expects through 2015, according to Mr. Reid. The stock sells for less than six times earnings and has a dividend yield of over 7%.

If European earnings disappoint, high-yield stocks should outperform precisely because they tend to have less optimistic growth forecasts to begin with, wrote Peter Sullivan, a strategist with HSBC Bank, in a Friday note to clients.

And the brewing storm, while frightening, should prove less severe than the 2008 financial crisis, according to Richard Taylor, head of European equity research at Jefferies. First, he says, companies are financially stronger now than then. Second, authorities have the benefit of lessons learned during the first crisis, including the importance of keeping credit markets functioning.

If gloom is a buy signal, it is time to scoop up worthy stocks from which others are fleeing indiscriminately. "This is the most risk aversion I've seen in my 26-year career," Mr. Taylor says.