When it comes to picking a high-yield dividend stock for your portfolio, Canadian investors have no shortage of great options to choose from. That list includes some of the best-known companies in the financial and energy sectors, utilities, and Canada’s big telecoms.
The big telecoms, in particular, are an interesting set of companies. They were traditionally viewed as some of the most defensive and best income producers on the market. In recent years, however, that landscape has changed.
Let’s look at two of those telecoms, BCE (TSX:BCE) and Telus (TSX:T), to see what’s changed and which dividend stock might be a better option right now.
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Why Telus and BCE no longer dominate the income conversation
For years, Telus and BCE were known for their reliable dividends and regular increases. Recent changes have altered that story.
Telecoms are capital-intensive businesses that require financing to maintain and upgrade their massive network infrastructure. When interest rates began to rise several years ago, both Telus and BCE faced higher financing costs while continuing to spend heavily on their network infrastructure.
This, along with other factors, put pressure on both stock prices and pushed their yields into double-digit territory. At the same time, elevated payout ratios, heavy capital requirements, and balance-sheet pressures led both companies to reset their dividends.
BCE reset its dividend in 2025, lowering the annual payout to $1.75 per share. It now targets a free-cash-flow payout ratio between 40% and 55%, giving it more financial flexibility.
Telus followed with its own much larger reset just this summer. In July, Telus slashed its own quarterly dividend to $0.19 per share, or $0.75 annually. That followed an earlier announcement that Telus was suspending its well-known dividend growth program. Management also shifted toward a trailing free-cash-flow payout target between 45% and 60%.
This should help strengthen the financial positions of both telecoms. But in doing so, they also remove one of the biggest reasons income investors historically held the stocks: dependable dividend growth.
As of the time of writing, Telus still offers a 5.51% yield, while BCE yields 5.36%. Those are still attractive income levels, but income investors may want to consider another dividend stock that offers a similar yield but without the dividend reset.
Here’s why Enbridge is the dividend stock I prefer
The dividend stock that I prefer right now is Enbridge (TSX:ENB). Enbridge currently offers a 5.6% dividend yield, which edges out both telecoms.
But that yield aside, the more important factor is that Enbridge continues to grow its dividend. In fact, the most recent uptick for 2026 was a 3% bump. That was also the 31st consecutive increase by Enbridge.
Most investors are familiar with Enbridge, but few realize just how much the energy infrastructure behemoth does.
The company operates one of the largest crude and natural gas pipeline networks on the planet. Additionally, Enbridge operates a growing renewable energy business with assets across North America and Europe. Finally, Enbridge also operates one of the largest natural gas utilities in North America.
Those segments are subject to long-term contracts or regulated frameworks. This means Enbridge generates a reliable and recurring source of revenue that lets it invest in growth initiatives and pay its dividend. That growth stems from its multi-billion-dollar backlog.
In other words, Enbridge operates a diversified network of energy infrastructure that generates cash and pays out one of the best dividends on the market.
Why Enbridge beats Telus and BCE for income investors
To be clear, I do like both Telus and BCE as income investments. I also think that they both hold potential.
Both still trade at a discount over where they traded several years ago. And with both yields over 5%, they represent a means for long-term investors with an appetite for risk to grow their position by reinvesting those dividends until that eventual turnaround.
That being said, Enbridge offers a similar yield backed by multiple defensive business segments. Those segments are generating cash without the same sustainability concerns.
Throw in the 31 consecutive years of increases, and Enbridge emerges as the better investment. In my opinion, Enbridge should be a core holding in any well-diversified portfolio.
