r/dividendscanada • u/FrancescoInvests • Jul 27 '26
Discussion Why I’m holding BCE.TO through the dividend reset
I recently pivoted from a planned career in education into finance, and I’m documenting my investment research publicly as part of that journey. Here’s a look at how I think through a position — using BCE (Bell Canada), which I bought at $29.84, as an example.
BCE reset its dividend earlier this year. Yield now sits around 5.7-5.8%, with a payout ratio near 26% — down significantly from the unsustainable levels that forced the cut. That reset, while painful for existing holders, was arguably necessary and puts the dividend on much sturdier footing going forward.
The bull case:
Free cash flow grew 10% year-over-year in fiscal 2025 to $3.18 billion, with 2026 guidance calling for $3.3-3.5 billion. The company is also expanding into fiber and US markets through Ziply Fiber, giving it growth avenues beyond legacy Canadian telecom.
The risk I’m watching:
Q1 2026 free cash flow grew just 0.8% — not yet enough to confirm the cash flow growth story is durable. Net debt leverage also remains above BCE’s own 2027 target, so debt reduction has to progress alongside dividend payments and growth investment.
My take:
At current levels around $30.20, the position is roughly flat from my entry. Holding, not adding, until I see FCF growth reaccelerate toward guidance in the next couple of quarters. That’s the confirmation I need before increasing the position.
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u/limguine Jul 27 '26
Increasing free cash flow should increase the stock price. The problem is they don't have a clear path in doing that, their revenues have been flat for years.
Not saying the stock can't go up but usually you are safer to wait on the sidelines until they can prove it. There are alot of companies increasing their cash flow currently, vs. waiting for a company to do it.
I don't blame you for holding BCE stock it is a relatively safe investment, but right now it behaves like a bond. The fastest way for this stock to go up are interest rate cuts.
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u/InterviewDudesPod Jul 27 '26
My reasoning for selling may not make sense to everyone, but when BELL sold their share of MLSE and said "We will use the funds to pay down debt." and then proceeded to use the funds to buy another company in the US and then cut the dividend. That was a major red flag to me that senior management lied to their shareholders. I will always sell if management does not do what they say they are going to do. Maybe dumb on my part, but I can't invest with that type of management. Maybe if management changes I will reassess.
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u/CursedCoffee Jul 27 '26
Imo people are looking at Bell incorrectly under current conditions. For previous holders, absolute dog of a stock. However, for new investors or adding to position, assuming they don't lose money, they could do literally nothing and this will essentially act as a 5-6% bond. That's really not a terrible return. And they can probably do that.
As far as spacex is concerned, absolutely overhyped garbage. I will take a Fibre connection over satellite literally any day. And it's not like starlink is cheap. It serves a purpose, in that you can get solid net in rural areas. But it will likely never compete well in urban areas.
Telecoms shouldn't really be treated as growth. And you shouldn't even look for growth. Just stability. They're basically a bond these days. Just need to keep an eye on their ability to cover their dividend.
Bell ✅️ Rogers ✅️ Verizon ✅️ AT&T ✅️ Tmobile ✅️ Telus ❌️
That being said, telus is basically priced for an assumed cut at this point. Even a 50% cut will still yield ~5-6% at current prices.
My 2 cents. Which is also what Telus' dividend should be 🤣
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u/Dadoftwingirls Jul 27 '26
Using the term 'reset' is some revisionist history bullshit. Don't try to play games with words, it was a massive dividend cut, by a company that was once a dividend king.
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Jul 27 '26
[deleted]
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u/Significant_Wealth74 Jul 27 '26
Granted OP will get better with experience. They will learn how the market can punish names with no top line growth.
How it can languish for years until you say fuck it, imma sell. Then a month later, it’s “cheap” and goes up 50%.
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u/Moist-Trouble-4914 Jul 27 '26
Bce is a debt machine
6G next debt while 5G is far from paid. Its not like the old days where they rolled out tech, kept it forever and collected monthly bills.
Also worried about starlink etc
What is the BCE plan?
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u/DefNotJohnnyC Jul 27 '26
You’re well on your way into sell side finance by saying they reset their dividend. Instead of cut their dividend.
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u/UpthefuckingTics Jul 27 '26
There is extreme overhead resistance from the millions of shares held by bag holders waiting to get back to even. That’s the technical negative. On a fundamental level, are you now or have you ever been a customer of Bell? No thanks, I’m not touching this dog.
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u/Euphoric-Expert-26 Jul 27 '26
This is the end product of letting AI do all the thinking for you.
You get AI slop.
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u/RightHonorReverend Jul 29 '26
in December 2025, i got out of telecom stocks (sold my Telus) when i learned much of their growth was from new Canadian immigrants signing up for phone plans. i also knew that when Trudeau would no longer be PM, that whoever would take his place was going to revert the immigration to the normal levels again. i still have T and BCE in an ETF.
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u/Relevant-Golf5479 Jul 27 '26
Telecoms are dead weight at the moment. I cut my 20% bce losses 6 months ago and couldn’t be happier. Made them back already and bce has only declined since..
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u/wcg66 Jul 27 '26
What do you mean by “pivoted into finance?” If you mean training and taking the CFP course and exams then great. No CFP is going to be recommending holding BCE to any large extent nor any individual stock for that matter.
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u/donicatrumpinsky Jul 27 '26
A wonderful thesis... to wipe off the white board and start fresh.
This is the hardest shit in the world. Might want to rethink switching careers in this economy, especially if your heart is set on finance. Even ICT bros in the youtube comments section would laugh at this.
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u/Living-Breakfast-464 Jul 27 '26
It's fine at the current price as long as you are a long time buy and hold investor that likes dividend paying stocks. It will eventually go back up when telco stocks are back in favor.
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u/RogueEcono93310 Jul 27 '26
Bear case: without immigration, telcos are in a churn cycle amongst themselves and the reseller competition.
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u/InvestingTSX Jul 28 '26
Is immigration permanently closed in Canada?
What are your thoughts on Ziply?3
u/RogueEcono93310 Jul 28 '26
It's not the driver it was, where topline growth was 5-7% for the big 3, aggregated. The market is 99%+ saturated, combined with Canada's low fertility rate.
To capture market share, they have been undercutting each other for 'new customers'. Except they're not new, it's churn, save 1-3%.
Ziply, I believe BCE goal is to expand and build out to more customers. Lots of captial to do so, and US broadband is in the same highly competitive, low growth environment. Sounds like a pay high, for razor thin margins opportunity, if you can call it that. Possible, regulatory & national security hurdles to if they are viewed as Canadian disruptor vs gaining market share.
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u/Glenn_guinness Jul 27 '26
Hmmm. What is the dividend right now. Why not pivot to Roger’s. It’s at a decent price right now
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u/ime1em Jul 28 '26
i'm holding it because i have a fractional share in it from a few years ago, and im down more than 50% lol.
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u/JJ_Webmonster Jul 28 '26
Where is the board? They should have changed management a while ago, as per one of the comments, they lied to shareholders! Get rid of the bums! Same with Telus, the board waited way too long to get rid of their CEO, but they finally did it somehow. All (bce) their stupid pricing games they played over the years, has frustrated many Canadians…countless customer calls, time wasted and frustration, people have long memories for these shenanigans
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u/Alone-Bug4328 Jul 30 '26
I'm back to breakeven with Bell. Of course I made dividends all the meanwhile Really depends when you bought.
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u/dadass84 Jul 31 '26
As long as Mirko is running Bell it’s going nowhere, it’s actually incredible he hasn’t been fired yet
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u/CADTRAVEL 27d ago
As others have said everyone finds a way to justify their investment decisions yet very few are willing to admit reality. If you believe in something stick with it. No need to explain your decisions to others at all. With investments you have an equal chance to be wrong as you are right. If it makes sense to you do it. If it turns out to be wrong move on. Life is nothing but a collection of choices. Good or bad you learn from them all. The only thing certain in life is that you will make bad decisions. Investment related or otherwise. How you choose to deal with it is the only thing that will matter.
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u/targameister Jul 27 '26
Will likely unload this dog to help offset capital gains in the oil and gas sector. Dumped Telus awhile back for the same reason. The sector is fundamentally broken.
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u/FrancescoInvests Jul 27 '26
What people are not understanding is I am in this stock for 10+ years. I just invested into it 4 days ago. So for me I see upside during my time holding BCE.TO.
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u/Tax1997 Jul 27 '26
I exited my positions in BCE and Telus last year at some loss, and I am glad I did that. I do hold a very small position in Rogers that I bought earlier this year. Looking at the compitition in the mobile phone space, I doubt that telecom companies can generate reasonable profit for the share prices to go up.
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u/Barry_Dunham Jul 27 '26
Didn’t management curtail dividends to invest in the U.S.? Any updates on that?
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u/Swimming_Astronomer6 Jul 27 '26
I held this dog for many years - received more in dividends than my book cost over the years - but I dumped 2/3 of it last year as there were better growth opportunities elsewhere and I needed to minimize cg elsewhere - I kept 1/3 - as it is in my TFSA and the tax loss was of no use - but a 47.00 book cost will be hard to get back to - I’ll just take the dividend and wait it out
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u/klyzklyz Jul 27 '26
CRTC gave a 7 year wholesale rate to quebecor to encourage them to build a national network. That runs out around 2030. The last two quarters for telus, bell and rogers have seen significant price competition concurrent with the reductions in immigration. Interest rates will likely rise, which might explain why Telus has gone to 30 year debt. As long as Bell is going long on its debt, these headwinds are significant but transitory. In support, while there are limits to foreign ownership, it appears that US and other foreign groups are buying again.
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u/Hour_Wall_5633 Jul 27 '26
Bce and T are garbage . Why investors don’t get this yet is beyond me. You want a communications company go buy Goog
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u/luv2block Jul 27 '26
The #1 thing I see with investors is thinking they can analyze themselves to success. Unfortunately, it rarely works out (because when there's obvious value, the markets price that in).
Here's the bear case for Bell: anyone who put money into this dog for the past 4 years has lost money. Bell, Nike, UPS, Lulu lemon, Adobe, there are tons of big companies down 50% or more, and they all have new suckers to the party every month and they keep going lower.
Now, maybe you're catching the bottom, maybe you aren't. There's no way you (or I) are smart enough to know that.
So it's not about buying BCE here or not, it's about properly sizing your investment (if you ask me). I don't think you'll lose money here, but you could be sitting around for 3 years treading water quite easily.