1 Magnificent Canadian Stock Down 17% to Buy and Hold for Decades

BCE’s dividend reset and share-price slump may be the painful setup that creates a better long-term entry point.

Amy Legate-Wolfe

Author Bio Amy became interested in investing in 2018 after having her first daughter. After receiving a masters degree in journalism from Western University, she became frustrated that the finance industry remained a confusing place for Canadians like her: new parents, millennials, and other young people who needed to understand their finances. Now, Amy focuses on tech companies and renewable energy for growth opportunities, coupling that with long-term investing strategies and equities. She also provides investors with a daily newsletter, Canada Stock Digest, for daily market updates. Her work can also be found at Canada's National Observer, where she writes on the business side of climate action. Before joining Motley Fool Canada, Amy wrote for major news organizations including HuffPost, CTVNews.ca, and CBC. When she’s not researching investing strategies, Amy’s time is pretty much monopolized by her two wild daughters, but in what little spare time she has she loves to do yoga, go on walks with her dog, and travel with her husband. Social Media Follow Amy on LinkedIn and Canada Stock Digest. Favorite Investment Quote “October: This is one of the particularly dangerous months to speculate in stocks. The others are July, January, September, April, November, May, March, June, December, August and February.” – Mark Twain

Published July 14, 4:10 pm EDT

Key Points

Canada’s telecom market isn’t a cozy growth story anymore, so cash flow matters more than legacy “safe yield” labels.
BCE is still generating solid EBITDA and free cash flow, which helps fund networks, debt, and the dividend.
The risks are heavy debt, fierce competition, and higher capex that could pressure free cash flow in 2026.

For years, investors treated telecom stocks like steady income machines. Pay the bill, use the phone, stream the show, complain about the bill, repeat forever. Then rates rose, competition tightened, debt got heavier, and suddenly the “safe” corner of the TSX looked a lot less cozy.

That reset creates the opportunity. The CRTC’s 2026 Canadian Telecommunications Market Report showed Canada’s telecom service sector generated $59.6 billion in 2024, unchanged from 2023. Mobile revenues rose 2.1%, but fixed internet barely grew, and older services kept shrinking. This is not a sleepy growth market anymore. It is a battle for customers, networks, and cash flow.

So investors need to ask a sharper question. Which beaten-down telecom can still earn its way through the next decade?

person on phone leaning against outside wall with scenic view at airbnb rental property — Source: Getty Images

BCE

BCE (TSX: BCE) deserves a look. Shares recently traded around $30.25, below their 52-week high of $36.25. That puts the stock down about 17% from that high. It’s not a catastrophic collapse from the past year’s peak, but it still shows how little enthusiasm investors have for the stock right now.

BCE stock owns Bell Canada, one of the country’s largest communications businesses. It provides wireless, internet, TV, media, business communications, cybersecurity, and cloud services. In normal-person terms, BCE sells the pipes, signals, screens, and services that keep households and businesses connected. Very glamorous, if your definition of glamour includes routers.

Yet the reason BCE stock can still work as a long-term holding comes from infrastructure. Canada needs fibre, wireless coverage, data centres, cybersecurity, and enterprise connectivity. That demand does not disappear because investors are grumpy about telecom margins.

Into earnings

BCE stock’s first-quarter results showed the business still has life. Adjusted earnings before interest, taxes, depreciation and amortization (EBITDA) grew 2.9% to $2.6 billion, while free cash flow increased 0.8% to $804 million. The company also pointed to 113% growth in artificial-intelligence (AI)-powered solutions revenue in Bell Business Markets, driven by demand for Ateko, Bell Cyber, and Bell AI Fabric.

That is the number investors should watch. BCE stock needs cash flow to fund its network, pay debt, invest in AI infrastructure, and support the dividend. The dividend story now looks more realistic, too. BCE stock declared a quarterly common-share dividend of $0.44 for July 2026, equal to $1.75 annually, yielding 5.8% at writing.

That lower dividend may still sting for longtime shareholders, especially after BCE stock previously guided to a much higher annualized payout of $3.99 for 2025. Yet a reset dividend can be healthier than an unsustainable one.

Looking ahead

The valuation looks more interesting after the pullback. A near-5.8% yield from a national telecom with fibre, wireless, media, and data-centre ambitions gives patient investors a reason to wait.

The risk is debt and execution. BCE stock still faces intense wireless and internet competition, regulatory pressure, high capital spending, and weaker free cash flow guidance because of its Saskatchewan AI data centre buildout. The company expects 2026 free cash flow to fall as it increases capital spending.

Still, decades-long investors do not need BCE stock to be perfect. They need the company to stabilize cash flow, grow fibre and enterprise services, and turn AI infrastructure from a spending story into a revenue story.

Bottom line

BCE stock is no longer the untouchable dividend darling some investors once imagined. That may be the point. A lower share price, reset payout, and stronger focus on fibre, AI, and business services could make today’s ugly chapter look like the start of a better long-term entry point.