Here is the short version: BCE (TSX:BCE) cut its dividend in 2025, does not plan to raise it anytime soon, and is betting its future on artificial intelligence and streaming.
If you can live with that, there is actually a compelling long-term case for this tech stock. If you bought BCE solely for its legendary yield, the picture is more complicated.
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BCE announced a historic dividend cut in 2025
In May 2025, BCE delivered one of the most jarring moments in its 145-year history. The company slashed its quarterly dividend from roughly $1.00 per share to $0.4375 per share.
It was the first time BCE had touched its dividend since briefly suspending payments during a failed buyout deal back in 2008.
So, why did the Canadian dividend stock reduce its payout by more than 50%?
BCE was wrestling with multiple headwinds, including fierce price competition, an unfriendly regulatory environment from the Canadian Radio-television and Telecommunications Commission (CRTC), slowing immigration, inflation, and an unsustainable payout ratio that had ballooned to 125% of free cash flow by the end of 2024.
Is the TSX dividend stock a good buy now?
BCE plans to return approximately $5 billion to shareholders in dividends over the next three years.
When you run the math, it indicates the dividend will remain at $1.75 annualized through at least 2027. The company aims to use excess free cash flow to reduce its balance sheet debt and reinvest in growth. The new target payout range is 40% to 55% of free cash flow, down from the bloated ratios of recent years.
The more interesting part of the BCE story right now is not the dividend. BCE launched three new businesses in 2025: Ateko, a technology services firm; Bell Cyber, a cybersecurity operation; and Bell AI Fabric, described as Canada’s largest full-stack artificial intelligence compute project.
The goal is for these three units to generate $2 billion in combined revenue by 2028.
Bell AI Fabric, launched in May 2025, is already scaling fast. In March 2026, BCE announced plans for a 300-megawatt data centre in Saskatchewan, the largest purpose-built AI facility in the country. Early construction has already begun.
On the media side, Crave, BCE’s streaming service, reached 4.7 million subscribers and is targeting six million by the end of 2028. The platform is among the fastest-growing products in the company’s history.
BCE also completed the acquisition of Ziply Fiber in 2025, expanding its fibre internet reach into the Pacific Northwest of the United States.
Is BCE stock undervalued?
Incoming Board Chair Louis Vachon told shareholders at the May 2026 meeting that he has been personally buying BCE shares over the past 12 months.
At current prices, BCE still offers a dividend yield well above 5%. If the company executes on its AI and fibre strategy, the share price should eventually reflect that progress.
Down 55% from all-time highs, the Canadian tech stock has grossly underperformed broader markets in recent years.
Analysts tracking BCE stock forecast free cash flow to expand from $2.4 billion in 2026 to $4 billion in 2029. If the TSX stock is priced at 12 times forward FCF, it could deliver over 50% returns over the next three years. If we account for dividend reinvestments, cumulative returns could be closer to 70%.
