Telus (TSX: T) and BCE (TSX: BCE) are some of the more generous high-yielders on the market these days. And while challenges facing the Canadian telecom scene might persist for some while longer, I think brave investors have a fairly decent shot of locking in a sizeable yield alongside what could be respectable recovery gains. Of course, bottom-fishing in stocks that are in multi-year ruts is never easy.
The quick gains aren’t going to come overnight. But in the case of Telus and BCE, you’re getting paid quite handsomely while you wait for things to turn. Even after BCE’s dividend reduction, investors are still getting a very nice aproximately 5% yield.
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Telus and BCE are yield-heavy, but risks remain
Of course, it’s quite modest in comparison to Telus’s nearly 9% yield, but, at the end of the day, both Telus and BCE shares seem historically discounted. And while it seems like few would go for BCE stock when Telus has a much larger payout, I think that the single-digit price-to-earnings (P/E) multiple on BCE, as well as the more promising technicals (a long-term bottom may already be in the books), makes the name an equally intriguing pick, especially for those who fear Telus’s dividend growth “pause” will follow some sort of reduction within the next two to three years.
In any case, BCE and Telus remain riskier deep-value types of names that might not give investors a whole lot to show for their patience on the capital gains front.
With Bell recently kicking off its 5G Plus Advanced mobile network to stay well ahead of the competition, questions linger as to whether the average Canadian consumer will really care about faster speeds if it means paying up substantially more for a monthly bill in a time when food inflation is still a bit out of control.
Rogers Communication: Deeper value than BCE and Telus?
In any case, Rogers Communications (TSX: RCI.B) might be a better value bet, especially after a remarkable quarterly profit clocked in just over a month ago. Wireless subscriber growth may still face challenges in the year ahead, but the media (led by sports) seems to be a strong point for the firm. Add operating cost reductions into the equation (minimizing overlap), and it certainly feels like Rogers has something over its rivals in the Big Three.
The stock is actually up close to 64% since its early-2025 lows, but despite the momentum, shares look to be even cheaper than its less-heated peers. At the time of this writing, the name goes for 4.3 times trailing P/E. That’s deep value that income investors shouldn’t pass up on, even if it means getting a far lower yield (3.62% right now) compared to the likes of BCE or Telus.
With a nice stake in Maple Leaf Sports & Entertainment and the potential to pursue a spinoff or initial public offering in the future to unlock value, I think there’s a lot to like about the sporty telecom going down the stretch.
Moving ahead, I’d look for continued cost cuts and deleveraging, all while the firm looks to experiment with satellite connectivity. If Canada’s telecoms really are headed for a capital expenditure cliff, Rogers could stand tallest of its peers. Arguably, it already has.
