It’s that point of yr while you bid adieu to 2025 and plan your 2026 investments. In your dividend portfolio, the widespread query is whether or not to build up extra shares of BCE (TSX:BCE). BCE was a inventory that slashed dividends by 56% and made an costly acquisition at a time when its market share was shrinking, income was declining, and debt was sky excessive. Ought to these challenges be taken as an indication of weak point or the beginning of the following progress chapter following a company-wide restructuring?
Higher dividend inventory for 2026: BCE or Telus?
Between BCE and Telus Company (TSX:T), Telus has secure income and dividend progress and is specializing in decreasing debt. However is it sufficient to maintain dividends? The higher-dividend inventory will depend on your funding goal.
Telus inventory
In case you are in search of quick passive revenue, since you are retiring or have a brand new expense developing, Telus is a greater dividend inventory for 2026.
Observe that every yr is completely different for various corporations. That’s how enterprise cycles work. 2026 is the yr for Telus as a result of the administration has elevated the January 2026 dividend by 4%. The corporate has decreased its capital spending and offered its 49.9% fairness curiosity in wi-fi tower operator Terrion for $1.3 billion and used a number of the proceeds to cut back leverage.
Within the third quarter of 2025, Telus decreased its web debt-to-earnings earlier than curiosity, taxes, depreciation, and amortization (EBITDA) to three.5 occasions from 3.8 occasions from the year-ago quarter. It has additionally elevated its free money stream, sustaining a cushty dividend payout of 75%. The ratios favour Telus because it has the monetary flexibility to maintain its present dividends and develop them within the 3–8% vary as guided by the corporate’s administration.
BCE inventory
Is there a compelling funding case for BCE? Ought to present shareholders proceed holding this inventory?
The corporate’s restructuring efforts from telco to techno are step by step shaping up. BCE has acquired Ziply Fibre and is seeing a surge in income from digital video promoting and synthetic intelligence (AI) powered enterprise options like Aetko and Bell Cyber. Nevertheless, the declines in standard enterprise of wireline and radio proceed to maintain earnings and free money stream stretched.
BCE has halved its dividend to deal with debt reimbursement and restructuring. This can take extra time as a difficult macro surroundings, excessive debt, and value competitors have delayed the restructuring final result. BCE is having problem discovering the precise purchaser for components of its companies.
Whereas BCE’s struggles have weakened its present monetary state of affairs, it has the potential to develop with tech. The corporate will deal with deleveraging, which might see no dividend progress for a yr or two.
Nevertheless, BCE’s efforts to construct AI Material and broaden into different high-growth companies might assist it enhance dividend progress in the long run. Those that personal BCE inventory and have an extended funding horizon can hold holding it for the 5-6% dividend yield and future share value appreciation when the techno enterprise picks up momentum.
Which is healthier for 2026 returns?
For investing in 2026, Telus is a greater purchase as you possibly can lock in a 9.3% dividend yield, use the dividend reinvestment plan (DRIP) choice, and revel in a 4% dividend progress. Nevertheless, BCE is a progress and dividend inventory for long-term progress and AI alternatives. The dividend yield might be round 5.3% with no dividend progress for a number of years. Nevertheless, the DRIP choice continues.
