Investing in blue-chip telecom shares means that you can achieve publicity to a recession-resistant sector. Sometimes, telecom shares pay a excessive dividend, enabling you to generate a gradual revenue stream throughout enterprise cycles.
Nevertheless, in 2025, Canadian telecom giants comparable to Telus (TSX:T) and BCE (TSX:BCE) have grossly underperformed the broader markets resulting from their weak stability sheets.
Whereas BCE slashed its annual dividend by 56% to $1.75 per share, Telus introduced a pause on its dividend hike. In January 2026, each Telus and BCE are down roughly 50% from all-time highs.
Whereas Telus provides buyers a yield of over 9%, BCE gives a decrease yield of 5.4%. So, let’s see which TSX dividend inventory is a greater purchase proper now.
Do you have to put money into BCE or Telus inventory proper now?
BCE and Telus are navigating related challenges as they work to strengthen their stability sheets whereas sustaining dividend commitments. Nevertheless, their strategic approaches reveal essential variations for buyers contemplating Canadian telecom shares in 2026.
BCE lately unveiled an bold three-year plan concentrating on sustainable free money stream (FCF) progress of roughly 15% yearly by means of 2028. It additionally forecasts income to develop between 2% and 4% whereas adjusted EBITDA (earnings earlier than curiosity, tax, depreciation, and amortization) is projected to increase by greater than 2%.
The TSX telecom big goals to generate $22 billion in cumulative FCF earlier than capital expenditures over the subsequent three years. Moreover, it plans to distribute $5 billion in dividends to buyers. BCE expects to cut back the web debt leverage ratio to three.5 instances by the top of 2027 and transfer towards a ratio of thrice by 2030.
Telus has additionally taken a conservative stance on dividends, pausing progress on the present quarterly degree of $0.4184 per share whereas the corporate works to enhance its valuation.
Telus initiatives stronger FCF progress at over 10% yearly by means of 2028. It has forecast FCF at $2.15 billion in 2025 and $2.4 billion in 2026.
Telus introduced it’ll cut back the low cost dividend-reinvestment program, starting with a step down from 2% to 1.75% in early 2026, ultimately reaching zero low cost by 2028.
Each firms are wrestling with excessive debt ranges. The web debt leverage ratio for BCE is round 3.8 instances, whereas Telus’s is decrease at 3.5 instances.
Is Telus inventory undervalued proper now?
BCE inventory is priced at 8.9 instances ahead FCF, which is comparatively low cost and under its 10-year common of 14 instances. Given consensus value targets, BCE inventory trades at a 13.5% low cost. If we modify for its dividend, cumulative returns could possibly be nearer to 19% over the subsequent 12 months.
Telus inventory is priced at 12 instances ahead FCF, under its 10-year common of 21 instances. Given consensus value targets, Telus inventory trades at a 21.6% low cost. If we modify for its dividend, cumulative returns could possibly be nearer to 30% over the subsequent 12 months.
For income-focused buyers prioritizing dividend-growth potential, BCE seems higher positioned. Nevertheless, buyers snug with dividend stability and drawn to aggressive FCF progress would possibly choose Telus.
