In the current market, two of Canada’s largest telecom companies — BCE Inc. and Telus Corporation — offer compelling but contrasting cases for dividend-oriented investors. Both have seen significant stock price declines from their peaks and are navigating heavy debt loads while trying to maintain shareholder returns. The decision between them in 2026 largely comes down to your priorities: dividend income, growth prospects, or risk tolerance.

Dividend Yield and Income
Telus currently offers a substantially higher dividend yield, north of 9 percent, reflecting its stock price weakness and the company’s decision to pause dividend increases rather than cut outright. By contrast, BCE’s dividend yield sits around the mid-5 percent range following a significant dividend reduction made to strengthen its financial position. For income-focused investors who prioritize immediate cash flow, Telus’s current yield is considerably more attractive.

Free Cash Flow and Growth Targets
Both companies have outlined multi-year plans to grow free cash flow. BCE has targeted approximately 15 percent annual free cash flow growth through 2028 and aims to generate substantial cumulative cash before capital expenditures while reducing its leverage. Telus also projects solid free cash flow growth — above 10 percent annually through 2028 — and is gradually phasing out its discounted dividend reinvestment program, which could improve shareholder returns over time.

Valuation and Risk
Valuation metrics suggest both stocks are trading below their historical averages on forward free cash flow multiples. BCE’s valuation appears cheaper relative to its longer-term historical average, which could appeal to investors seeking value with some downside cushion. Telus, while also trading at a discount historically, commands a slightly higher multiple, reflecting its relative operational stability and growth prospects.

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Strategic Differences
From a strategic standpoint, BCE is focused on deleveraging and securing long-term cash flows, while Telus balances dividend support with operational expansion. This includes diversifying into areas like health and digital services that could support future growth. BCE’s higher debt and recent dividend cut suggest ongoing financial pressure, whereas Telus’s pause on dividend hikes reflects a more cautious but stable approach.

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Objective assessment points to Telus as the more compelling choice for investors seeking strong immediate dividend income and a stable cash-flow profile, provided you can tolerate volatility and the current pause in dividend growth. BCE may appeal to value-oriented investors willing to accept a lower yield today in exchange for potential upside if its turnaround plan succeeds over the long term. Both companies carry telecom sector risks, including competition and high leverage, so diligence on balance sheet trends is essential before allocating capital.