Valued at a market cap of $28 billion, BCE (TSX:BCE) is Canada’s largest communications company. It provides wireless, wireline, internet, streaming, and television services to residential, business, and wholesale customers.

Earlier this month, BCE made headlines with a dramatic 56% dividend cut, reducing quarterly payments from $0.9975 per share to $0.4375 per share. It was the telecom giant’s first dividend cut in 17 years. The decision reflected years of financial strain, with dividend-payout ratios exceeding 100% of free cash flow and reaching an unsustainable 125% in 2024.

The dividend cut addressed issues that included intense competition, regulatory uncertainty following recent CRTC (Canada Radio-Television and Telecom Commission) decisions, and inflationary headwinds that squeezed margins. Moreover, BCE’s high debt burden forced the company to prioritize balance sheet optimization and deleveraging over shareholder distributions.

Despite the dividend cut, the TSX tech stock rallied over 6% following the announcement. This indicates investors are optimistic about BCE’s focus on financial discipline and growth opportunities. The new dividend policy targets a sustainable 40-55% payout ratio and provides flexibility for debt reduction and strategic investments. Despite the dividend cut, BCE stock offers shareholders a tasty dividend yield of 5.8%.

BCE also announced a partnership with PSP Investments to create Network FiberCo. The partnership will target U.S. fibre expansion through the pending Ziply Fiber acquisition. Under this agreement, BCE will hold 49% of Network FiberCo while PSP Investments will contribute $1.5 billion for a 51% stake.

Network FiberCo will develop one million fibre passings in Ziply’s existing markets while targeting up to five million additional passings. This means that Ziply could reach eight million fibre locations. The ambitious expansion leverages non-recourse debt financing to optimize capital efficiency and enables BCE to gain traction in the underpenetrated U.S. broadband market.

Is the TSX dividend stock a good buy right now?

BCE CFO Curtis Millen detailed the telecommunications giant’s strategic priorities during a JPMorgan conference. In the closely watched event, Millen emphasized that BCE will focus on customer experience, network expansion, technology services growth, and digital media transformation following the company’s significant dividend cut and announcement of the U.S. fibre partnership.

The TSX dividend stock expects to lower its leverage ratio to 3.5 times by 2027 and three times by 2030, down from the current 3.8 level post-Ziply acquisition. This deleveraging path incorporates approximately $2 billion in annual cash savings from the dividend reduction, $1.5 billion in equity contributions to Network FiberCo distributed over time, and proceeds from targeted asset monetization of $7 billion in non-core assets.

The Network FiberCo joint venture with PSP Investments represents a capital-efficient approach to U.S. fibre expansion. It targets six million additional fibre passings over eight to 12 years at approximately $1,000 per passing. BCE will maintain 100% of retail customers while paying wholesale fees to the partnership for last-mile infrastructure.

BCE demonstrated pricing discipline in wireless operations despite softer subscriber growth, focusing on margin-accretive additions rather than market share gains. BCE achieved strong performance in fibre markets, reaching 45% penetration within three years of deployment. Further, Bell Media delivered robust growth with 36% earnings before interest, tax, depreciation, and amortization expansion driven by digital transformation initiatives.

Management expanded its cost savings program to $1.5 billion by 2028, leveraging automation and process simplification to enhance operational efficiency while improving customer experience across all business segments.

What is the target price for BCE stock?

Analysts expect the TSX stock to increase adjusted earnings per share from $3.04 in 2024 to $4.47 in 2029. Today, BCE stock trades at 11 times forward earnings. If it maintains a similar multiple, it will trade around $49 per share in early 2029, indicating an upside potential of 50% from current levels.

The post BCE Just Announced a Dividend Cut: Is This TSX Stock a Good Buy Right Now? appeared first on The Motley Fool Canada.

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JPMorgan Chase is an advertising partner of Motley Fool Money. Fool contributor Aditya Raghunath has no position in any of the stocks mentioned. The Motley Fool recommends JPMorgan Chase. The Motley Fool has a disclosure policy.

Shopify (TSX:SHOP) went public in May 2015 and has since returned over 4,000% to shareholders in the past decade. It means that an investment of $2,500 in the TSX tech stock soon after it went public would be worth nearly $105,000 today.

Despite these market-thumping gains, Shopify stock trades almost 40% below all-time highs and is currently valued at a market cap of US$123 billion.

Let’s see if Shopify can stage a rebound over the next two years and reclaim its record highs.

Is Shopify a good stock to own?

Shopify is one of the largest e-commerce companies globally and reported revenue of US$8.9 billion in 2024, a 26% year-over-year increase. It has two primary business segments: subscription solutions and merchant solutions.

Subscription solutions revenue grew by 28% to US$2.4 billion in 2024, accounting for 26% of total revenue. This growth is driven by diverse pricing plans that scale with merchant needs, from basic plans for entrepreneurs to Shopify Plus for enterprise-level operations. Shopify’s Monthly Recurring Revenue (MRR) reached US$178 million in December 2024, up 24% year over year, indicating strong merchant retention and platform adoption.

Merchant solutions continued to be the key revenue contributor, accounting for 74% of total sales, and grew by 25% to US$6.5 billion in 2024. This segment generates revenue through Shopify Payments, the company’s integrated payment processing service, as well as other offerings like Shopify Capital, which provides financing to eligible merchants in the U.S., U.K., Canada, and Australia.

Shopify’s platform facilitated US$292.3 billion in Gross Merchandise Volume (GMV) in 2024, a 24% increase from 2023. Shopify serves a diverse merchant base across various retail verticals and geographies, with no single merchant representing more than 5% of total revenue.

Looking forward, Shopify is investing in several strategic areas to drive future growth. These include expanding its merchant base globally, localizing features for specific markets, developing new solutions that extend platform functionality, leveraging emerging technologies like artificial intelligence (through offerings like Shopify Magic and Sidekick), and enhancing its ecosystem of over 16,000 apps.

Shopify explains that building a “100-year company” requires balancing growth with profitability and continues to make strategic investments across multiple time horizons. With notable merchants, including BarkBox, Vuori, SKIMS, and Supreme, choosing Shopify for their commerce needs, the platform continues to demonstrate its appeal to businesses of all sizes seeking reliable, cost-effective, and scalable commerce solutions.

Is SHOP stock undervalued?

Shopify’s growth story is far from over, given its forecast to increase sales from US$8.9 billion in 2024 to US$16 billion in 2027. While its revenue is forecast to grow by 21.6% annually in the next two years, estimated growth for adjusted earnings and free cash flow growth is much higher at 28% and 26%, respectively.

In the last 12 months, Shopify stock has traded at a forward price-to-earnings multiple of 67 times. If the tech stock is priced at 50 times forward earnings, it will trade around US$131 in early 2027, indicating an upside potential of 35% from current levels.

Meanwhile, analysts remain bullish on the TSX stock and expect it to gain 27% over the next 12 months.

The post Where Will Shopify Stock Be in 2 Years? appeared first on The Motley Fool Canada.

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Fool contributor Aditya Raghunath has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends Shopify. The Motley Fool has a disclosure policy.

The ongoing market volatility has dragged valuations of several TSX stocks lower in 2025, making them attractive to value investors. In this article, I have identified one such Canadian tech stock in Vecima Networks (TSX:VCM), which currently trades 57% below all-time highs. Let’s dive deeper.

Should you own this TSX stock right now?

Valued at a market capitalization of $243 million, Vecima Networks develops hardware and software solutions for broadband access, content delivery, and telematics. It operates through three segments:

• Video and Broadband Solutions: The segment processes data from the cable network and delivers internet connectivity to homes over cable and fibre.
• Content Delivery and Storage: The segment offers solutions and software for service providers and content owners that focus on producing, storing, delivering, and streaming video for live linear, video-on-demand, network digital video recorder, and time-shifted services over the internet.
• Telematics: The segment provides information and analytics to help fleet managers manage both mobile and fixed assets.

Vecima Networks has increased its sales from $71.5 million in fiscal 2017 (ended in June) to $291 million in fiscal 2024, indicating an average annual growth rate of over 22%.

Vecima reported mixed results in fiscal Q2 with revenues of $71.2 million, up 15% year-over-year but down 13% sequentially. Despite the increase in consolidated sales, Vecima faced temporary headwinds that impacted profitability, resulting in an adjusted EBITDA (earnings before interest, tax, depreciation, and amortization) of $1.1 million and a net loss of $7.9 million.

CEO Sumit Kumar characterized Q2 as “complex,” citing multiple overlapping challenges. It includes a shift in product mix toward the company’s new EN9000 platform, which carries a lower margin profile as a standalone product.

Higher margins ahead

While strategically important, this modular node platform is designed to be populated with higher-margin software-driven modules over time. Additionally, customer timing adjustments for network upgrades slowed Entra products’ sales pace as Tier 1 operators worked through system-level field qualifications.

Vecima also recorded $4.3 million in non-cash foreign exchange losses and implemented a workforce reduction of 12%, resulting in $2.8 million in restructuring costs. Management expects this restructuring to yield annualized cost savings of about $17.5 million.

Despite near-term challenges, Vecima highlighted several strategic achievements during the quarter. It completed the acquisition of Falcon V Systems, which brought crucial new software technologies, including Principal Core for platform orchestration and Test Suite for accelerating DAA software upgrades.

What next for this TSX tech stock?

Looking ahead, management acknowledged that continued demand volatility may persist into the second half due to customer project timing and uncertainty around potential U.S. tariffs on Canadian goods.

While cautious about near-term forecasting, Kumar expressed confidence in Vecima’s long-term prospects, citing the company’s strong market position (approximately 40% global share in Remote PHY devices and over 80% in remote MACPHY) and deep relationships with major operators.

Bay Street expects Vecima to grow its sales to $358 million in 2026. Moreover, adjusted earnings are forecast to expand from $0.89 per share in 2024 to $1.19 per share in 2026. If the TSX stock is priced at 15 times forward earnings, it will trade around $18 per share over the next 12 months, indicating an upside potential of more than 75% from its current levels.

Analysts also expect Vecima to report free cash flow of $33 million in 2025. Today, Vecima pays shareholders an annual dividend of $0.22 per share, indicating an annual dividend expense of $5.4 million and a payout ratio of less than 20%.

The post 1 Magnificent Canadian Stock Down 57% to Buy and Hold Forever appeared first on The Motley Fool Canada.

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Fool contributor Aditya Raghunath has no position in any of the stocks mentioned. The Motley Fool has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy.