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Given the recession-resistant reputation of companies operating in the health care industry, Johnson & Johnson (NYSE:JNJ) may seem an unlikely candidate to bounce back from a downturn in the business cycle. But the fact remains that, for a number of reasons, this industry titan's stock is beaten down and should recover quite nicely when headwinds stop working against it and start to shift toward its back.

The primary culprit for J&J's lagging share price performance is the uncertainty stemming from two primary operating segments. Nearly 40% of sales come from the pharmaceutical unit and a stable of billion-dollar drug franchises such as Remicade, Procrit/Eprex, and Topamax. The challenges in pharma are similar to those that archrivals such as Merck (NYSE:MRK) and GlaxoSmithKline (NYSE:GSK) are facing -- namely,the loss of patent protection against generic competition. Additionally, there have been safety concerns over a number of J&J's drugs, including blood-clot risks for Procrit and Eprex that anemia patients use to boost their red blood cell count. Biotech titan Amgen (NASDAQ:AMGN) sells competing products and has seen its stock swoon because of its higher exposure to the drug category. Given these headwinds, this segment is only growing sales in the single digits.

The medical device segment, at about 35% of sales, is seeing its own challenges, thanks to uncertainty over the safety and effectiveness of drug-eluting stents and claims that companies operating in the orthopedic industry were getting too cozy with surgeons to support sales and boost product loyalty. Rivals such as Boston Scientific (NYSE:BSX) and Stryker (NYSE:SYK) have also been adversely affected. The end result at J&J has also been mid-single-digit top-line growth, with more than half the growth coming from currency benefits that go with a weak U.S. dollar and international sales.

Throw in a struggling stock market that is preoccupied with whether the U.S. is officially in recession and it's easy to see why J&J's share price has been overly anemic as of late. But take a step back and it becomes apparent that now is a great time to consider anteing up for some shares. For starters, the third and final consumer segment, which makes up about a quarter of sales, is, like industry leader Procter & Gamble (NYSE:PG), a steady-eddy performer through the sale of well-known skin, baby, and oral care products such as Neutrogena and Listerine. And despite the tough top-line trends in the largest segments, sales grew by more than 11%, continuing a more than 100-year trend (yes, you heard it right) of annual double-digit sales growth.

The coming year should turn out just fine as well -- analysts are calling for earnings of $4.45, which puts the stock at a very reasonable 14 times earnings and happens to be one of the lowest multiples J&J has traded at in 15 years. Throw in a 2.9% dividend yield, and not only do I see a stock built to withstand a further bear market, I also see one with plenty of upside potential, given its diversified revenue stream, impressive profitability, and geographic breadth. I'll take that in any economic climate.

Don't just take my word for it. The Motley Fool CAPS community has awarded J&J a five-star rating, which happens to be the highest a company can garner. The bullish commentators speak to J&J's consistency and ability to perform in any economic environment. The best the bears can come up with is to bemoan the stock's trading range and fact it has moved little in the past couple of years. But let me tell you, that's not all that bad, considering that the market is flat and rivals such as Amgen and Boston Scientific are down close to 30% over this time frame. All the more reason to consider J&J a recession-proof holding with plenty of potential to bounce ahead once conditions become more favorable.

If you agree with me that J&J is headed for better things, jump on over to CAPS and rate J&J an outperform.