2 Canadian Dividend Giants to Buy With Rates on Hold

BCE and Telus are high-yield stocks that are adapting to a difficult telecom environment, while finding areas of growth along the way.

Karen Thomas, MSc, CFA

Karen is a stock market enthusiast focused on uncovering those stocks that she believes the market has mispriced. She does this through fundamental and quantitative analysis of companies and their industries, as well as a study of future opportunities and trends. She holds a Masters degree in Finance, the CFA designation, and has over 20 years of experience in the investment management industry. Having worked at a major pension fund, as well as two leading mutual fund firms as an analyst and portfolio manager, she has solid investing expertise which she aims to share with her readers.

Published July 15, 4:30 pm EDT

| More on: BCET

Key Points

The Bank of Canada has held its overnight interest rate at 2.25% for five consecutive meetings since October 2025 amid economic and geopolitical uncertainty, with a sixth consecutive hold expected at Wednesday's meeting, providing relief for heavily indebted telecom stocks.
BCE stock, down 50% since 2023 after cutting its dividend, is executing a turnaround plan focused on debt reduction and higher-growth businesses like Bell business markets (revenue up 9.7% with 113% growth in AI-powered solutions) and its U.S. Ziply acquisition, while currently yielding 5.87%.
Telus stock, down 45% from 2023 with its dividend growth program halted, is reinventing itself through diversification into smart home energy, tech-enabled healthcare, and security, with Q1 showing 19% free cash flow growth to $583 million and Telus Health EBITDA up 11%, offering an extremely generous 11.4% yield that rewards patient investors.

The Bank of Canada’s overnight interest rate is currently 2.25%, and it has been on hold since October 2025 as economic and geopolitical uncertainty remain elevated. As always, the Bank of Canada continues to toe the line between keeping inflation in check and stimulating economic growth.

Right now, they’ve been hesitant to move either way, and interest rates have been unchanged for the last five consecutive meetings. The next meeting and decision will come on Wednesday, and economists expect it to mark the sixth consecutive meeting of unchanged interest rates.

So now investors are faced with a decision. With rates on hold, which Canadian dividend stocks should they buy?

Group of people network together with connected devices — Source: Getty Images

Canadian telecom stocks

Things are settling after the upheaval in the Canadian telecommunications industry in recent years. We’ve seen declining revenue growth, stretched balance sheets, cash flow problems, and worst of all, changes in dividend policies. This, coming from two of the most well-respected and reliable Canadian dividend giants.

As a result, telecom stocks BCE Inc. (TSX: BCE) and Telus Corporation (TSX: T) have taken big hits – BCE cut its dividend, and Telus halted its dividend growth program. However, both BCE and Telus have been adapting. They continue to have industry advantages and are focusing on their own growth platforms to drive growth in the years to come.

With interest rates on hold, both heavily indebted companies have caught a break.

BCE

Over at BCE, the stock has buckled under the pressure of a changing regulatory environment. More competition has effectively sent mobile pricing lower, eating away at BCE’s mobile business. BCE’s stock price has been cut in half since 2023.

But this Canadian dividend giant has embarked on a plan: debt reduction, investing in higher-growth businesses, and returning to earnings growth. BCE stock’s most recent update demonstrated good progress on all these fronts.

Bell business markets is a leading Canadian provider of broadband network and communications services. It is a growth area for this telecom giant, and as such, the company is devoting less capital to its legacy business in favour of investing here. In the company’s latest quarter, Bell business markets saw its revenue increase 9.7%. This was driven by a 113% growth rate in artificial intelligence (AI)-powered solutions.

Bell stock is currently yielding 5.9%. With an improving balance sheet and growth drivers such as BCE’s AI-powered solutions and its U.S. Ziply acquisition, there is real hope for this dividend giant.

Telus

Like BCE, Telus has also suffered from the changed competitive landscape. The stock is down 45% from 2023 levels, and its dividend growth program has been halted.

But Telus has also diversified its business and has some growth drivers that look promising. For example, Telus’ wireline business delivers more than connectivity. It also offers smart home energy. This is a comprehensive home energy management service that tracks energy usage, automates energy savings routines, and provides tips and tricks. Telus also offers tech-enabled health care, and security offerings.

Telus’ recent first-quarter results show the promise of this reinvention. Operating revenue increased 1% to $5 billion, and adjusted earnings before interest, taxes, depreciation, and amortization (EBITDA) was flat at $1.8 billion. Also, free cash flow increased 19% to $583 million. Over at Telus Health, adjusted EBITDA increased 11%.

Telus stock is currently yielding a very generous 11.4%.

The bottom line

As interest rates remain on hold, and as BCE and Telus stock continue to reinvent themselves, consider buying these two Canadian dividend stocks. Their elevated yields are extremely appealing, and they reflect investor skepticism and recent turmoil. However, for investors who are able to wait for balance sheet improvements and growth initiatives to yield the expected results, these yields are the ultimate reward.