BCE Stock vs. TD Bank: Which Dividend Giant Wins in 2025?

BCE (TSX:BCE) and another dividend stock that could be worth picking up for a new-year comeback.

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In my opinion, the TSX Index has a greater abundance of deeper value options as well as dividend yields (north of 5% is not uncommon anymore). In this piece, we’ll look at some of the harder-hit names in the high-yield waters this January. Indeed, they probably won’t appeal to anyone who’s not either looking to trade a quick bounce or lock in a dividend yield for the long haul.

If you’re looking for severe undervaluation and are willing to ride out continued volatility, magnificent opportunities may arise to score capital gains alongside a fat dividend yield.

Of course, telecom firm BCE (TSX:BCE) and TD Bank (TSX:TD) have been the hard-hit talks of the town of late. Their share prices crumbled drastically last year. At the same time, their yields have swollen to tower above many of their peers.

BCE and TD stock may not be a smoother ride, but if all goes well, the potential upside may very well be outsized. That said, if you’re a conservative investor or risk-off retiree, the following blue chips probably won’t be your style anymore. They’ve gotten volatile and they remain somewhat risky for anyone with an investment horizon of less than four years, at least in my opinion. Either way, let’s look at the two names to see which dividend giant is the better fit.

BCE

Don’t look now, but the dividend yield is getting close to 12%. That’s close to twice the yield the stock commanded just north of two years ago. And while BCE is still a trusted blue chip, I’m not so sure the dividend will make it through another few years. Still, a 50% cut would give you a shining 6% dividend yield, which is pretty good given the low price of admission at $33 and change.

As they say, it tends to be darkest before dawn. And in the case of this battered telecom stock, I do think that the road ahead could prove more rewarding than that of the broader market averages.

We’ll have to wait to see what the coming earnings results (Q4 2024 numbers and 2025 guidance coming in a matter of weeks) serve up. It’ll either be met with huge sighs of relief or “more of the same” and perhaps a bit of downside. Either way, I like the odds going into earnings, especially if BCE has more to share with us regarding its longer-term plans.

Created with Highcharts 11.4.3Bce PriceZoom1M3M6MYTD1Y5Y10YALLwww.fool.ca

TD Bank

While I am never a big fan of pursuing shares of a company for their elevated yields or beaten-down share prices, I do think that writing off a long-time banking titan like TD is never a good idea, especially with all the potential needle-movers that could come into affect in the coming months.

Over the last year, TD stock was a huge dud. But year to date, TD is winning big, with close to 8% gains in 2025 thus far. While the first month of performance isn’t a sign of what’s to come, I do think TD is the cheapest of the Big Six. With a 5.1% yield, massive changes to management ahead, and potential positive growth surprises, I would not take profits on the latest year-to-date surge. I think it’s the beginning of something special as TD attempts to play catch up with its big bank rivals.

Created with Highcharts 11.4.3Toronto-Dominion Bank PriceZoom1M3M6MYTD1Y5Y10YALLwww.fool.ca

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This article represents the opinion of the writer, who may disagree with the “official” recommendation position of a Motley Fool premium service or advisor. We’re Motley! Questioning an investing thesis — even one of our own — helps us all think critically about investing and make decisions that help us become smarter, happier, and richer, so we sometimes publish articles that may not be in line with recommendations, rankings or other content.

Fool contributor Joey Frenette has positions in Toronto-Dominion Bank. The Motley Fool has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy.

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