Put on your helmets! It's time to bring in the defense.

The National Bureau of Economic Research disseminated the glum news on Monday that investors knew in the back of their minds: The U.S. is in a recession and has been since payrolls peaked in December of 2007.

It's late in the game. We're in the fourth quarter, your portfolio is down, the clock is ticking and Mr. Market is playing hardball. No doubt you've tried to remain on the offense, but now the game rules have shifted to defense. The health-care sector is full of defensive plays, as many of these companies operate in recession-resistant industries. Just because the economy has fallen off a cliff, doesn't mean people are going to ignore their health problems.

Companies like Amgen (NASDAQ:AMGN) and Gilead Sciences (NASDAQ:GILD) in the biotech industry are examples of financially strong companies with promising pipelines that target large markets. What's more, the recession should have little impact on their businesses. Take Gilead, for example: According to one analyst, the company has one of the best HIV drug lines on the market. Those who have AIDS will continue to require Gilead's treatments, recession or no.

Another example is biopharmaceutical company Emergent BioSolutions (NYSE:EBS), which is best known for its BioThrax vaccine that treats anthrax. One of the company's biggest customers is the Federal Government. Emergent has secured over $850 million in contracts with the U.S. government for the delivery of over 33 million doses of BioThrax, securing strong revenue for the next three years.

To find winning companies, I used the Fool's CAPS screening tool, looking for companies that:

  • Operate in the health-care sector
  • Have posted a revenue growth rate of 5% or better for the past three years
  • Have a return on equity of 17% or greater to ensure efficiency
  • Have market caps of $500 million or greater
  • Have a current ratio of one or greater, to ensure liquidity
  • Were rated "outperform" by at least one analyst on Wall Street
  • Have CAPS ratings of four or five stars, the highest two from our CAPS community

In the first 20 months since we began our CAPS investment community, four- and five-star companies outperformed the market, with average annualized gains of 7% and 12%, respectively.

Company Name

Market Capitalization

Rev. Growth Rate (last 3 Years)

Return on Equity (TTM)

Current Ratio (mrq)

Amgen

$60.9 billion

6.4%

20.5%

3.2

China Medical Technologies (NASDAQ:CMED)

$513 million

61%

23.5%

2.6

Emergent BioSolutions

$707 million

20.6%

24.4%

2.9

Gilead Sciences

$42.0 billion

34.1%

44.3%

3.4

Intuitive Surgical (NASDAQ:ISRG)

$5.2 billion

51.3%

17.1%

4.4

Johnson & Johnson (NYSE:JNJ)

$159.0 billion

8.1%

27.6%

1.6

Meridian Biosciences

$940.6 million

14.4%

23.5%

6.2

Mindray Medical International (NYSE:MR)

$2.0 billion

44.4%

21.7%

2.2

Novartis

$107.8 billion

8%

23.9%

1.6

Source: Motley Fool CAPS. TTM = trailing 12 months; mrq = most recent quarter.

This is only a starting place. Prospective investors should pay careful attention to companies' respective businesses, position in the competitive landscape, and financial health. Also, be mindful of valuation, as many investors on Wall Street are aware of the promise that companies in the health-care sector hold in this environment.

Start padding your portfolio at Motley Fool CAPS today! Let the collective wisdom of our 120,000 member-strong investment community help you make better investing decisions.

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Mindray Medical and Intuitive Surgical are both Motley Fool Rule Breakers picks and the Fool owns shares of Mindray. Johnson & Johnson is an Income Investor recommendation. Try either newsletter free for 30 days.

Jennifer Schonberger owns shares of Johnson & Johnson, but does not own shares of any of the other companies mentioned in this article. The Fool has a disclosure policy.