Earlier in 2025, I looked at BCE Inc. (TSX: BCE) through a very specific lens: tax-loss harvesting. In a non-registered account, selling below your cost base and using the capital loss to offset future gains can be a practical way to extract value from a bad stock pick. At the time, that framing made sense. It is now 2026, which raises a different question. Is BCE finally a buy today?
That question comes after a major reset. In mid 2025, BCE cut its dividend in half, from $0.9975 per share to $0.4375. That move materially improved the company’s financial flexibility by bringing its payout ratio down to about 43.1% of free cash flow. Previously, BCE was paying out more than it generated, which was not sustainable.
That said, the company is not out of the woods. Investors are still digesting its acquisition of Ziply in the U.S., with no clear line of sight yet on whether it will be accretive. Debt-to-equity ratios remain elevated, and cost-cutting has been aggressive, particularly at the management level, with multiple rounds of layoffs.
My view has not changed. This is not a stock I am personally bullish on, nor one I would go long on today. Still, there are characteristics within BCE’s business that may appeal to certain investors. This article focuses on those traits and then looks at an infrastructure-focused exchange-traded fund (ETF) that may offer similar exposure and income generation with better consistency.
What I like here has less to do with BCE
What attracts me is not BCE as a company, but the broader nature of infrastructure assets. Telecoms fall into this category, even if they are not usually framed that way. Infrastructure, in my view, consists of essential service providers with physical footprints, long-lived assets, and cash flows tied to long-term usage rather than short-term consumer sentiment.
Telecoms generally fit this model. They generate revenue through subscription-based services, operate networks that are costly to replicate, and benefit from scale as populations grow and urban areas expand. Demand is relatively steady, and pricing power tends to be durable over long periods.
Where the model breaks down is execution. Telecoms rely heavily on debt to fund network buildouts, which magnifies risk when rates rise or growth slows. In Canada, the oligopolistic structure also limits incentives to innovate or meaningfully improve consumer outcomes. With only a handful of players, competition is constrained, and returns depend more on financial engineering than operational excellence.
Even so, the core infrastructure mentality still holds. The appeal lies in owning assets that provide essential services, generate recurring cash flows, and scale alongside macro forces like population growth and urban density. That is the exposure I want. I just prefer accessing it through a broader and more diversified vehicle.
The infrastructure ETF I prefer instead
Rather than owning BCE directly, I prefer an infrastructure-style ETF such as the Hamilton Enhanced Utilities ETF (TSX: HUTS).
This ETF tracks the Selective Canadian Utility Services High Dividend Index. It holds an equal-weighted mix of telecoms, pipelines, and utilities. That balance matters, particularly when one company faces company-specific challenges.
HUTS also differs structurally from most Canadian equity ETFs through its use of modest leverage. For every $100 of investor capital, the fund borrows about $25 to invest additional assets. That leverage can enhance returns and income, but it also increases downside risk. It is not a free lunch, and it is important to understand the trade-off.
Income is a central feature here. The ETF currently offers an annualized yield of about 6.4%, paid monthly. For investors focused on cash flow from infrastructure-like assets, that combination of diversification, income, and scaled exposure can be more appealing than relying on a single telecom stock.
