We are getting closer and closer to the end of 2025, and the stock market is full of companies in some of the most exciting fields, working on everything from space technology to Artificial Intelligence (AI). Unfortunately, we have been seeing plenty of stock market volatility in the last few weeks. Investing in growth stocks might not be the wisest idea right now.
When markets become uncertain, newer investors typically take their money off the market and flock toward safe-haven assets. However, more experienced investors tend to reposition their portfolios and replace high-risk stocks with those with a reputation for being more reliable investments.
The TSX has no shortage of reliable blue-chip stocks. The Canadian telecom space might not be the flashiest or the most exciting, but the big fish in this industry are well-established giants. Even if market volatility leads to sharp declines in share prices, industry giants typically have the economic moat to emerge stronger on the other side of volatile market conditions.
Today, I will discuss an industry-leading telco stock to help you determine whether it might be a good addition to your holdings as 2025 draws to a close.
Source: Getty Images
BCE
BCE Inc. (TSX: BCE) is a $30.2 billion market capitalization stock. The company provides wireless and internet services across Canada. The telco holds around a third of the total market share in Canada, making it one of the Big Three telcos in the country. However, the stock has not been performing well on the stock market lately.
Earlier in the year, BCE stock announced that it was slashing its dividends in half. The move was designed to lower its payout ratio and improve its financials. Despite the sound logic behind the move, plenty of investors have panicked, and we can see the impact.
As of this writing, BCE stock trades for $32.37 per share. The stock is down by 16.1% from its 52-week high levels. What many considered to be a “safe stock” has seen a sell-off that newer investors might find uncharacteristic of the blue-chip telecom stock.
Why I still like the stock
Being battered and bruised, the stock might not look too attractive to investors, especially after the dividend cut. However, investors losing confidence in the stock is not enough for me to stay away from it.
After the dividend cut, the company’s payout ratio is more sustainable. The dividend is on a solid footing and well-positioned to grow annually at a much higher rate than its historical averages. The Bank of Canada has started decreasing key interest rates. Higher interest rates have put immense pressure on companies over the last two years. Lower interest rates can help the company expand its wireless and fibre infrastructure while keeping costs under control.
Foolish takeaway
I would consider BCE stock a solid holding for any stock market investor’s portfolio due to its reliable dividends and capital gains over the years. The firm is among the top telcos in the country. It has a wide enough economic moat to weather the storm of market downturns. I think it can be a good investment for investors who can ride the wave of short-term uncertainty.
