Last fall, we compiled a group of 10 core stocks for your portfolio. My contribution was Johnson & Johnson, the so-called "health-care mutual fund."

Since then, J&J completed a brutal fourth quarter, as a 15% sales plunge in its consumer-products division led to a 5.5% sales drop overall. Meanwhile, in a booming market, its stock price is a smidge lower than when I recommended it. That's not what we expect from a core stock!

Before I explain why this happened and give you my current thoughts, here's a quick snapshot of the company:

Company Johnson & Johnson (NYSE: JNJ)
What it does J&J is a major player all over the health-care space, from consumer products to prescription drugs to medical devices.
Recent Price $60.60
Market Cap $166.6 billion
Trailing P/E Ratio 12.7
Return on Equity, Last 12 Months 24.7%

Source: Capital IQ, a division of Standard & Poor's.

Why this happened
We saw a nice price for Johnson & Johnson back in the fall for the same reason that it's been muddling through recently: The company's plagued by product recalls. From its consumer products to the artificial hips in its medical-devices division, it feels like a new recall gets announced every week.

While these recalls are troubling, and well worth keeping an eye on, I'm still sticking with J&J.  

Why it's still a core stock
A core stock is first and foremost a great company, proven over many market cycles and challenges. And any true core stock will still be relevant 10 years from now.

There are actually quite a few of these companies in the consumer-products and health-care fields that J&J plays in. We could argue about the strength of R&D pipelines in health care, but in consumer products, Procter & Gamble (NYSE: PG) and Kimberly Clark (NYSE: KMB) spring immediately to mind. Delving deeper into your house's cabinets, Colgate-Palmolive, Clorox, and Church & Dwight also qualify. They meet each of the criteria above, and all of them are dividend payers with reasonable balance sheets.

Besides Johnson & Johnson's solid 3.5% dividend yield, its net cash position, and its AAA credit rating, why Johnson & Johnson over these other companies? Frankly, it's selling for an unbeatable price.

The key to buying core stocks is waiting to buy them a good prices. Even after factoring in the cash it's spent on acquisitions, J&J is trading at an enterprise-value-to-free-cash-flow ratio of just less than 11. And looking backwards, it's clear J&J's cash flow power isn't a fluke.

Take this stock and call me in the morning
Let's be clear. If Johnson & Johnson didn't have its recall woes, its stock still wouldn't thrash a hot market. In fact, it's very likely to trail the market in good times. But the steady reliability of J&J stock will comfort the core of your portfolio when the market gets a boo-boo. Especially when your buy-in price is right.

Johnson & Johnson is a Motley Fool Inside Value recommendation. Johnson & Johnson, Kimberly Clark, Clorox, and Procter & Gamble are Motley Fool Income Investor selections. Motley Fool Options has recommended a diagonal call position on Johnson & Johnson. The Fool owns shares of Johnson & Johnson. Motley Fool Alpha owns shares of Johnson & Johnson. Try any of our Foolish newsletter services free for 30 days.

Anand Chokkavelu doesn't own shares of any company mentioned, but loves J&J's heartburn products. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.