A juicy dividend yield can be hard to resist for Tax-Free Savings Account (TFSA) investors, especially when you’re trying to build reliable tax-free passive income. But a higher yield doesn’t automatically make a stock the better long-term investment. That’s worth remembering when comparing well-established Canadian dividend stocks like Rogers Communications (TSX: RCI.B) and BCE (TSX: BCE).
Both have struggled on the stock market in 2026, creating potential opportunities for investors willing to look past short-term weakness. In this article, I’ll compare the fundamentals and growth prospects of these two TSX-listed telecom giants to see which stock looks more attractive for a TFSA today.
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Share prices and dividend income
Let’s start with what TFSA investors would pay today and the income each stock offers. Toronto-based Rogers, which provides wireless, Internet, and media services, has lost 18% over the last year. It currently trades at $45.34 per share, giving it a market cap of $24.6 billion and a 4.4% annualized dividend yield.
Meanwhile, BCE, which operates wireless, broadband, media, and enterprise technology businesses, has slipped 15% over the past year to $28.43 per share. With a market cap of $26.5 billion, BCE offers a much higher 6.1% annualized dividend yield. That’s appealing for passive income, but dividends alone shouldn’t be the reason to choose one stock over the other.
What recent financials reveal
Despite intense competition in Canada’s telecom market, Rogers’ latest financial results showed encouraging signs. In the third quarter of 2026, its revenue rose 2% year-over-year (YoY) to $5.4 billion, backed mainly by growth in its sports and media business. The company’s adjusted EBITDA (earnings before interest, taxes, depreciation, and amortization) also inched up by 1% to $2.5 billion, helped by improving wireless and cable margins.
BCE reported its latest earnings for the second quarter of 2026, with revenue rising 1.5% YoY to $6.2 billion, partly driven by its Ziply Fiber acquisition and stronger media revenue. Its adjusted EBITDA increased 1% to $2.7 billion, while adjusted earnings climbed 3.2% to $0.65 per share. However, BCE’s Canadian telecom operations continued to face revenue pressure.
Cash flow and balance sheet strength
If you look at the cash flow and balance sheet strength, Rogers clearly looks interesting for long-term TFSA investors. Its quarterly free cash flow in the latest quarter surged 65% YoY, helped by lower capital spending, improved operating earnings, and reduced cash taxes. In addition, its debt leverage ratio improved to 3.7 times by September 2026, before its latest sports acquisition closed.
By comparison, BCE’s free cash flow declined 9.5% YoY in the second quarter to about $1 billion, mainly due to higher investments in fibre networks and artificial intelligence (AI) infrastructure. While these investments could support future growth, the increased spending is putting pressure on its near-term cash generation.
Long-term growth opportunities
Beyond its core telecom business, Rogers recently spent $4.4 billion to acquire the remaining 25% stake in Maple Leaf Sports & Entertainment, gaining complete ownership of iconic franchises like the Toronto Maple Leafs and Toronto Raptors. Although the debt-funded acquisition adds financial obligations, Rogers plans to sell a minority stake in its broader sports business by the first half of 2027 to support debt reduction.
BCE, on the other hand, is focusing heavily on fibre connectivity and AI-powered services. In its latest reported quarter, the company’s AI-powered enterprise businesses recorded an impressive 29% YoY jump in combined revenue. Recently, BCE announced an agreement to sell a 49.9% stake in its wireless tower infrastructure business for $2.5 billion, which could help strengthen its balance sheet while supporting future investments.
Which telecom belongs in your TFSA?
While BCE offers more immediate dividend income, Rogers looks more attractive to me for long-term TFSA investing right now. Its improving free cash flow, operational efficiencies, and opportunities to unlock value from sports assets could support stronger returns over time. However, BCE may appeal more to investors primarily seeking higher tax-free passive income.
