There's little doubt that companies in the Dow Jones Industrial average appear to defy logic, despite market capitalizations in the hundreds of billions of dollars. Johnson & Johnson (NYSE:JNJ) is such a firm. My contention is that negative short-term news and a flagging stock price have resulted in low enough expectations to allow for a compelling risk/reward trade-off for Fools looking for large-cap health-care exposure.

As I mentioned in my opener, I think that current concerns over Procrit, drug-eluting stents, and the DePuy medical device unit are only short-term in nature and are masking what is otherwise a very strong, well-diversified business. In other words, J&J's stock will perform like the stocks of its peers once near-term challenges subside.

In terms of valuation, we're looking at a company that has grown annual earnings and cash flows in the double digits over the past five years. Despite this growth, J&J has experienced significant multiple contraction, as its P/E ratio has dropped from 32 at the end of 2000 to a current 18.

This is not much different than many of the Dow Giants, including Wal-Mart (NYSE:WMT), General Electric (NYSE:GE), and Procter & Gamble (NYSE:PG). And while I don't expect Fools to get rich quickly by investing in these names, I would recommend taking a closer look after any share price weakness. J&J is currently an opportunity, and there should be nice upside, since the market expects it to grow free cash flow only 8% annually -- a low bar given its long-term growth track record.

Check out the other arguments in this duel, and then vote for a winner.

Johnson & Johnson is an active Income Investor pick and Wal-Mart is an Inside Value newsletter pick.

Fool contributor Ryan Fuhrmann is long shares of J&J, but has no financial interest in any other company mentioned. Feel free to email him with feedback or to discuss any companies mentioned further. The Fool has an ironclad disclosure policy.