BCE (TSX:BCE) stock has been through the wringer lately, sitting 15% below its March peak and leaving many investors wondering if Canada’s telecom giant is finally trading at fire-sale prices. With second-quarter earnings around the corner on August 7, 2025, and some major strategic moves underway, let’s dig into whether BCE stock deserves a spot in your portfolio in July 2025.
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BCE stock in July: The numbers tell a story
Following a recent 56% dividend cut, BCE stock’s payout currently yields 5.7%. That’s a far cry from the double-digit yields we saw earlier this year, but still attractive in today’s market. The dividend cut might have stung shareholders, but management made this tough decision to accelerate deleveraging efforts and provide enhanced financial flexibility for future growth.
The telecom giant carries more than $38.1 billion in net debt, representing 2.2 times its equity value. That may sound alarming as intense price competition eats into the industry’s capacity to generate free cash flow, but it’s reasonable in the capital-intensive telecom industry. What matters more is management’s clear roadmap to reduce the net debt leverage ratio to 3.5 times adjusted EBITDA (earnings before interest, taxes, depreciation, and amortization) by the end of 2027.
Recent strategic moves creating value
Early in July, BCE closed its $4.2 billion sale of its minority stake in Maple Leaf Sports and Entertainment (MLSE) to Rogers Communications. While this provides a nice cash boost, the real excitement lies in how these proceeds will be deployed. The company is using this capital to fund its ambitious $5 billion acquisition of Ziply Fiber, expanding BCE’s fibre footprint into the underserved U.S. market.
A strategic partnership with PSP Investments may help fund BCE’s U.S. fibre growth cost-effectively, reducing the company’s capital investment and improving free cash flow by over $1 billion from 2026 to 2028. This partnership structure is particularly astute as BCE retains operational control while PSP provides the capital muscle needed for expansion.
The competition reality check
Let’s be honest about BCE’s competitive landscape. Canadian telecom remains intensely competitive, with pricing pressures affecting all players. BCE’s mobile phone average revenue per user was down 1.8% during the first quarter, though this represents a second straight quarter of improvement in the year-over-year rate of decline. The company is focusing on margin-accretive subscriber acquisition rather than chasing unprofitable growth. Investors will get more colour on the price competition front in next month’s quarterly report. It’s still tough out there for everybody in the sector.
The BCE stock investment case
BCE stock may represent a compelling opportunity for patient, long-term oriented investors in July. The company trades at what appears to be a significant discount while executing a strategy for growth.
BCE stock is exchanging hands at forward enterprise value-to-EBITDA multiples under 6.7 in July. The stock trades around the cheapest levels it has ever been in a decade. Investors can scoop BCE stock at valuations lower than COVID-19 market crisis-level multiples of 2020.
Most noteworthy, the BCE’s dividend is significantly derisked now, yet remains a respectable yield to add to a dividend portfolio at today’s discounted prices.
BCE is most likely turning a corner as it continues to generate positive free cash flow to service debt.
Compared to peers, BCE’s 5.7% dividend yield sits between Telus at 7.6% and Rogers Communications at 4.5%. The dividend cut, while painful, demonstrates management’s commitment to financial discipline. The new payout policy targeting 40% to 55% of free cash flow provides flexibility while maintaining an attractive yield. For income-focused investors, BCE’s adjusted dividend still offers meaningful returns in a low-rate environment.
Investor takeaway
I am slowly turning bullish on BCE stock as it shows signs of a classic value opportunity this month. The company has made tough decisions to position itself for long-term success, even if it meant short-term pain for shareholders. The combination of Canada’s largest fibre network, a strategic U.S. expansion, and improving operational efficiency creates a compelling investment thesis as shares trade at fire-sale prices in July 2025.
Is BCE a buy, sell, or hold? The telecom stock is a hold as it turns a corner. However, its compelling valuation may be attractive to new investors looking to add a layer of long-term passive income for retirement.
