This Beaten-Down Dividend Stock Is Off 10% and Still Worth Owning

It wasn’t all that long ago when shares of Restaurant Brands International (TSX:QSR) were surging, blasting off to new all-time highs not seen in some years.

Led by a wave of impressive quarterly earnings results and relative resilience in an environment that hasn’t been all that sanguine for the consumer, it felt like QSR would be well on its way to making even higher highs, as it blew past its ceiling of resistance of around $107 and change per share.

The correction hit hard and fast

Fast forward to today, and shares of QSR have had quite a vicious pullback, now off close to 10% from recent highs. Indeed, the stock has been on a bit of a losing streak, but not a whole lot has changed in the past month, perhaps other than the share price, which is 10% lower than where it sat.

Now going for $99 and change, questions linger as to whether the latest dip is more of a buying opportunity or if it’s an early sign to run for the hills as the fast-food juggernaut looks to follow in the footsteps of most other industry peers that are in a world of pain right now amid rising costs across the board. Indeed, with all the inflation that’s hit and more pricing pressures to come, it feels like the industry headwinds might soon catch up to QSR as well.

In any case, I think the strength of Tim Hortons and Burger King is here to stay. With the company recently unveiling its new Canadian expansion plan over at Tim Hortons, which has really excelled with the morning crowd, I think that QSR is one of the restaurant names that’s more than worthy of sticking with, even as industry pressures start to weigh again.

Time to buy the dip in QSR?

With the dividend now sitting at 3.51%, I’d be inclined to be a buyer rather than a seller on the latest dip. Could the so-called “value wars” start to weigh a bit on margins? Perhaps, but I think the reinvigoration in Burger King (people really do like the new Whopper) is just getting started.

As management seeks to manage costs at the in-store level while ensuring enough value to keep customers coming back (I still think there’s share-taking potential in a harsh market) and expanding the footprint further, I wouldn’t bet against this dividend star just because there’s a bit of a hurdle on the road higher.

Things could be a bit tougher for Restaurant Brands moving forward, but I certainly wouldn’t discount the latest wave of earnings beats.

In my view, the company has a nice formula for growth, and one that I believe is far more resilient in the face of industry-wide pressures. Recession, stagflation, or not, I’d be more inclined to view QSR as a more defensive play and wouldn’t shy away from the name on the latest wave of weakness. I think it’s a prime time to hit the buy button, but, of course, that’s just my opinion.