Here’s the Stock I’d Choose Over Telus or BCE Every Time

I trust Berkshire Hathaway infinitely more than any Canadian telecom stock.

Key Points
  • BCE and Telus have both substantially reduced their dividends as Canada's telecom giants prioritize balance-sheet repair.
  • Berkshire combines substantial free cash flow with hundreds of billions of dollars in liquidity, giving management considerably more capital-allocation flexibility.
  • Berkshire pays no dividend, but for a long-term TFSA investor focused on total return, I consider that a feature rather than a drawback.

Canadian telecom stocks used to be among the easiest dividend investments to own. Recent events have shown why a long dividend history does not make a payout permanent.

BCE (TSX: BCE) cut its annualized dividend by 56.1% in May 2025, taking it from $3.99 to $1.75 per share as management sought to strengthen its balance sheet and reduce leverage. Then, on July 31, 2026, Telus (TSX: T) followed with a 55% reset, cutting its quarterly payout from $0.4184 to $0.1875 per share.

I don’t think either company has an easy road ahead. Lower Canadian immigration means slower population growth and potentially fewer new wireless and broadband customers. Meanwhile, telecommunications remains enormously capital-intensive. Fibre networks, spectrum, 5G infrastructure, data centres, and AI ambitions all require money at the same time management is trying to deleverage.

If I’m looking for a long-term compounder instead, I’d rather own Berkshire Hathaway (NYSE: BRK.B). It doesn’t offer a dividend at all, but I think its balance sheet, free cash flow, diversification, and capital-allocation flexibility make it considerably more attractive as a buy-and-hold investment.

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.

Give me the fortress balance sheet

The biggest difference starts with financial flexibility. According to Yahoo Finance, Berkshire recently had approximately US$397.4 billion of cash, while its trailing levered free cash flow stood at US$61.2 billion. Its debt-to-equity ratio was only about 17.7%.

I wouldn’t treat all $397 billion as excess cash. Berkshire’s enormous insurance operations require substantial liquidity, and its insurance float was approximately US$176.9 billion at the end of the first quarter.

Still, compare that position with Canada’s telecom giants. Yahoo Finance recently showed BCE with just $1.38 billion in cash, a debt-to-equity ratio around 182%, and $2.68 billion in trailing levered free cash flow. Telus has likewise explicitly said that the cash freed by its dividend cut will be directed toward paying down debt.

Berkshire’s liquidity gives it options. Management can buy entire businesses, purchase publicly traded stocks, invest in existing subsidiaries, repurchase Berkshire shares when they’re attractively valued, or simply hold Treasury bills until better opportunities appear. That’s the type of balance sheet I want behind a stock I intend to own for decades.

I don’t care that Berkshire pays no dividend

BCE currently has a forward dividend yield of about 5.9%, according to Yahoo Finance. Telus’s newly reset annualized dividend is $0.75 per share, which works out to roughly 5% around its recent post-cut share price. Yahoo Finance’s displayed forward yield can temporarily lag after a dividend reset, so I wouldn’t rely on the old $1.67 annual rate still appearing in some market-data feeds.

Berkshire pays exactly zero. I’m perfectly fine with that because dividends are only one component of total return. When a company pays you a dividend, cash leaves the business. What matters is whether management could have generated a better return by retaining that money, and Berkshire has plenty of alternatives.

It can reinvest in its operating businesses, make acquisitions, buy securities, strengthen an already formidable balance sheet, or repurchase its own shares. I would rather have management allocate capital where it sees the best prospective return than receive a dividend simply for the sake of receiving one.

There is also a nice benefit for Canadians holding Berkshire inside a Tax-Free Savings Account (TFSA). U.S. dividends would ordinarily face a 15% withholding tax inside a TFSA. Because Berkshire doesn’t pay one, there is nothing to withhold. Any share-price appreciation can instead compound inside the account without Canadian tax.

BCE and Telus might still appeal to investors who specifically need current income and don’t mind bagholding. But if I’m choosing one business to own for long-term total return, I’ll take Berkshire’s diversification, free cash flow, and financial flexibility every time.

Fool contributor Tony Dong has no position in any of the stocks mentioned. The Motley Fool recommends Berkshire Hathaway and TELUS. The Motley Fool has a disclosure policy.

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