There’s been a lot going on with the telecommunications sector right now. Yet there’s a reason we’re not looking at Rogers, or Shaw today, or even Quebecor. These companies are all up in the air amidst merger discussions. This is why today we’re going to look at the more stable of the batch with Telus (TSX:T) and BCE (TSX:BCE).
Amidst all this trouble, let’s look at whether Telus stock and BCE stock are buys today.
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BCE
BCE stock has been undergoing a lot of trouble lately. The company is in the midst of discussions with the Canadian Radio and Television Commission (CRTC) after several changes. CRTC wants the company and other larger telecom companies to share access to their wireline and wireless services. This is a goal to create more competition in the industry.
However, at the same time, BCE stock is also being faced with pressure from online streamers. The CRTC is trying to push more Canadian content, asking foreign streaming services to provide a subsidy to Canadian content production. However, BCE stock wants Crave to be kept out of this.
This is all happening while under huge financial pressure, with BCE stock laying off 1,300 employees and closing nine radio locations and two foreign bureaus. It was also expected to reach nine million customer locations by 2025, but that’s been cut down to 8.3 million.
So, now, BCE stock is down 15% in the last year, and while it offers a 7.18% dividend yield, that could be cut too amidst all this financial strain.
Telus
Meanwhile, Telus stock has also been going through its own issues. After major growth during the pandemic, including the opening of a tech stock, it’s now had to shrink far back. While it doesn’t have to face the same issues as BCE stock in terms of streaming services, that does mean there is a lack of diversification.
And with more competition, this will perhaps mean less growth for Telus stock, as it continues to try and expand its wireless and wireline options. Even so, the company is hoping there will be financial relief coming for these wireless companies, such as Telus stock, amidst all the financial strain.
Yet there does seem to be more positivity, with C-suite employees buying shares of the company. This could mean Telus stock and its management are still confident in the company’s future — for now, at least.
Today, you can grab Telus stock with a 6.24% dividend yield. Not as high as BCE stock, but perhaps with a bit more stability in the future with more growth on the way. So, while there is a bit less diversification for Telus stock right now, that could be a good thing.
Therefore, of the two, I would perhaps consider Telus stock over BCE stock — at least for now. That being said, if you’re looking for long-term growth, both offer a great opportunity — especially with shares down in the last year and dividend income to add to your portfolio.
