Berkshire Hathaway Shines in Bear Markets, But These Two Stocks Are Even Better Buys

In volatile markets, investors seek stability. Berkshire Hathaway (BRK.B) has long been a stalwart, delivering robust returns through economic cycles. Yet, in the 2025 bear market, two stocks—Philip Morris International (PM) and Welltower (WELL)—are outperforming even Warren Buffett’s empire. Here’s why they’re worth your attention.

Berkshire Hathaway: A Bear Market Proven Performer

Berkshire’s 29.06% year-to-date (YTD) return through May 2025 highlights its enduring appeal. Its success stems from a mix of cash reserves ($334 billion), resilient operating businesses (e.g., insurance, railroads), and a focus on dividend-rich stalwarts like Coca-Cola and Chevron.

However, two stocks are outpacing it:

1. Philip Morris International (PM): The Tobacco Titan’s 77% Surge

Why It’s Better Than Berkshire:
- One-Year Return (May 2024–May 2025): 77.44%, dwarfing Berkshire’s 29% YTD.
- Defensive Sector Dominance: Tobacco is a classic recession hedge. Addictive products and stable demand ensure cash flow even in downturns.
- Global Diversification: Operates in over 180 countries, reducing regional risk.
- Innovation Edge: Investing in smoke-free products (e.g., heated tobacco) positions it for long-term growth.

Key Metrics:
- Free Cash Flow Margin: Consistently above 30%, enabling dividends and buybacks.
- Dividend Yield: 4.5%, higher than Berkshire’s 0.1%.

2. Welltower (WELL): Healthcare Real Estate’s Steady Gains

Why It’s Better Than Berkshire:
- One-Year Return (May 2024–May 2025): 58.77%, outperforming Berkshire’s YTD.
- Recession-Proof Sector: Healthcare demand remains constant, even in economic slumps.
- Stable Cash Flow: A REIT with a portfolio of hospitals, senior living facilities, and medical offices.

Key Metrics:
- Occupancy Rate: Consistently above 95%, ensuring steady rental income.
- Dividend Yield: 4.1%, with a 25-year history of increases.

Why These Stocks Outperform Berkshire

While Berkshire’s diversified portfolio and cash reserves are strengths, PM and WELL benefit from sector-specific tailwinds:
1. Tobacco’s Resilience: PM’s products are inelastic demand goods, shielding it from economic swings.
2. Healthcare Infrastructure Demand: Aging populations and rising healthcare spending drive Welltower’s growth.

In contrast, Berkshire’s returns are diluted by its reliance on equity markets—its Apple stake fell 17% YTD due to trade tensions—while PM and WELL’s cash flows are less equity-dependent.

Conclusion: Bear Markets Favor the Definitive

The data is clear:

Stock	1-Year Return (2024–2025)	Dividend Yield	Sector Stability Score
Berkshire Hathaway	29.06%	0.1%	8/10
Philip Morris	77.44%	4.5%	9.5/10
Welltower	58.77%	4.1%	9/10

PM and WELL combine high returns, recession-resistant sectors, and strong dividends, making them superior bear market buys. While Berkshire remains a solid holding, investors seeking higher returns should allocate more capital to these two.

Final Take:
In 2025’s bear market, PM and WELL are the sharper picks. Their defensive moats and superior performance metrics make them essential additions to any risk-averse portfolio. As Buffett himself might say: “Rule No. 1: Never lose money. Rule No. 2: Never forget Rule No. 1.” These stocks help investors do just that—and profit while doing it.