A Dividend Giant I’d Buy Over BCE Stock Right Now

Dividend giants can be great because they promise two things investors crave: consistency and patience. These companies usually sell essential services, generate predictable cash flow, and reward shareholders through steady payouts that can compound quietly over time.

For decades, BCE (TSX:BCE) fit that mould perfectly, offering reliable income and a sense of safety. But markets change, costs rise, and even giants can stumble. A dividend alone is not enough if growth stalls and balance sheets tighten, which is why investors are starting to question whether BCE stock still deserves its traditional pedestal. So, let’s take a look.

BCE

BCE stock has long been considered one of Canada’s classic dividend giants, built on its dominant telecom network and recurring subscription revenue. It provides wireless, internet, and media services that households rely on daily, which historically made its cash flows dependable. That reliability allowed BCE stock to raise its dividend for years and attract income-focused investors who valued stability over excitement. For a long time, owning BCE stock felt like owning a utility with a bonus yield.

Recent earnings, however, have exposed cracks in that story. BCE stock faced rising costs, intense competition, and heavy capital spending needs to maintain and upgrade its network. Revenue growth has slowed, margins have come under pressure, and free cash flow has not kept pace with dividend growth as comfortably as before. Then came the big catalyst: a dividend cut. The stock’s performance reflects that strain, with shares significantly lower than past highs and investor sentiment cautious rather than confident.

Valuation also complicates the picture. BCE stock’s dividend yield looks attractive on the surface, but much of that yield comes from a falling share price rather than improving fundamentals. High debt levels limit flexibility, and ongoing spending requirements reduce room to manoeuvre if conditions worsen. While BCE stock may still appeal to investors seeking income today, the risk is that the dividend no longer comes with the same margin of safety or growth potential it once did.

Consider GWO

Great-West Lifeco (TSX:GWO) offers a different version of a dividend giant, one that looks better positioned right now. GWO operates across insurance, retirement, and wealth management, benefiting from long-term demographic trends like aging populations and longer retirements. Its earnings come from diversified sources, including premiums, fees, and investment income, which helps smooth results across economic cycles. That diversification makes its cash flow less vulnerable to a single competitive threat.

Recent earnings have strengthened the case. Great-West delivered solid profit growth, supported by improved operating efficiency and stable demand across its business lines. Earnings momentum translated into healthier cash flow coverage for the dividend, which gives investors confidence rather than anxiety. The stock has also held up better than many income peers, suggesting the market still trusts the underlying business.

From a valuation perspective, GWO looks more balanced. Its yield remains appealing without relying on a collapsing share price, and its balance sheet provides more flexibility to navigate changing market conditions. Unlike BCE stock, GWO does not face relentless capital spending just to stand still. Going into upcoming earnings, it offers a cleaner combination of income, resilience, and modest growth. For investors reassessing what a dividend giant should look like today, Great-West Lifeco feels like the sturdier choice.

Bottom line

While both of these dividend stocks remain essential, one certainly comes ahead of the other. BCE stock is a bit stuck, needing to refocus and navigate its place in the telecom world. Meanwhile, GWO is expanding, with even more room to grow. Furthermore, here’s what both offer in terms of a $7,000 investment with dividends.

So, while BCE stock has long been a dividend all-star, it might no longer hold that position. GWO, meanwhile, could just be getting started.