BCE vs. Telus: Which Telecom Belongs in Your TFSA?

A long-term TFSA investor willing to be patient should ideally consider this telecom stock first.

Key Points
  • Telecom stability still matters, and Telus (TSX:T) looks like the better TFSA fit.
  • While BCE (TSX:BCE) remains solid, Telus offers a much bigger yield and deeper upside.
  • Telus keeps building through health, digital, and AI investments that could support a rebound.

At first glance, big telecom stocks like BCE (TSX: BCE) and Telus (TSX: T) look like two sides of the same coin. Both are among Canada’s largest telecom companies, both generate recurring revenue from essential services, and both have long been popular with dividend investors.

Yet the market isn’t treating them equally. Years of industry challenges, heavy capital spending, and investor concerns have pushed both stocks lower, but one has been punished much more than the other. That matters even more when you are deciding what belongs in your Tax-Free Savings Account (TFSA).

Should you stick with the company that looks a little steadier today, or buy the stock offering a significantly higher dividend yield and greater recovery potential? The answer isn’t as straightforward as simply choosing the biggest company or the safest balance sheet. But when you compare their growth opportunities and long-term outlooks, one stock stands out as the more compelling investment for investors willing to be patient. Here is why.

Canadian investor contemplating U.S. stocks with multiple doors to choose from.

A person stands in front of several doors representing different U.S. stock options for Canadian investors.

Let’s start with the valuation and income picture

While both BCE and Telus are Canada’s top communications businesses, the market is valuing them differently. Currently, BCE trades at $29.69 per share with a market cap of about $27.7 billion and a dividend yield of 5.8%. At the same time, Telus trades at $14.55 per share with a market cap near $22.9 billion, while its dividend yield sits at 11.5%.

However, neither stock has escaped the telecom sector’s recent weakness. BCE is down about 18% from its 52-week high, while Telus has fallen roughly 37%. A steeper decline isn’t automatically a positive, as it reflects the challenges investors see today. But if Telus continues to execute well and sentiment toward the sector improves, its larger pullback could also leave more room for the stock to recover.

Telus has more growth levers beyond the core business

Interestingly, Telus is not relying only on wireless and internet subscriptions to improve its growth outlook. In the first quarter of 2026, it added 262,000 mobile and fixed customers while growing service revenue 1% year-over-year (YoY). Its EBITDA (earnings before interest, taxes, depreciation, and amortization) for the quarter held steady at $1.8 billion, and free cash flow jumped 19% YoY to $583 million.

The more interesting part is where Telus’ next leg of growth could come from. Notably, Telus Health increased service revenue and EBITDA by 11% last quarter and now reaches 169.6 million lives globally. Similarly, Telus Digital revenue also climbed 22% from a year ago as the company leaned harder into artificial intelligence (AI) and data services. Those businesses give Telus more avenues for expansion than traditional telecom services alone.

BCE still offers quality, but Telus looks more compelling

That said, BCE is far from weak. It remains one of Canada’s largest communications operators, with wireless, broadband internet, television, media, business services, and U.S. fibre exposure through Ziply Fiber. That scale helps explain why income investors may still want to keep it on the radar.

But the main problem is that the BCE case feels more about stability than upside. Telus, by contrast, combines a higher yield with clearer internal growth drivers, including health technology, digital services, and AI infrastructure.

Telus is also committing to invest about $66 billion across Canada through 2030, which should support its network quality, customer growth, and longer-term position in the country’s communications market.

My telecom pick for a TFSA today

If your main goal is the safest possible telecom income stream, BCE stock could still make sense. But if you want a stock that can potentially pay you generously while also giving you a better shot at capital appreciation, Telus stock looks like the stronger choice. It’s cheaper, it yields more, and it has more visible growth catalysts working in its favour.

Fool contributor Jitendra Parashar has positions in Bce. The Motley Fool recommends TELUS. The Motley Fool has a disclosure policy.

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