Canadian revenue traders have had a tough trip over the past 18 months. BCE (TSX: BCE) slashed its dividend by greater than half in Might 2025, and Telus (TSX: T) returned the favour in July 2026.
Regardless of the dividend reduce, each TSX tech shares provide shareholders a pretty yield in November 2026. On the time of writing, BCE affords a yield of 5.8%, whereas for Telus it’s marginally increased at 6%.
Let’s see which telecom large has a greater dividend outlook following Q3 outcomes.
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Why BCE and Telus reduce their dividends?
Telus and BCE have been pressured to chop their dividends attributable to elevated debt ranges and rising curiosity funds. On the finish of Q3, BCE reported a leverage ratio of three.7 occasions, whereas the metric for Telus was comparable at 3.6 occasions.
BCE goals to decrease the leverage ratio to three.5 occasions by the tip of 2027, whereas the goal for Telus is way extra bold at 3 times or decrease by the tip of 2028.
BCE reduce its annual payout from $3.99 to $1.75 per share, and Telus lowered its annual dividend from $1.67 to $0.75.
On the November 6 name, Telus CEO Victor Dodig defined:
“These selections have been tough, however they have been needed.”
BCE Q3 outcomes: A coated dividend with a skinny cushion
In Q3, BCE’s income rose 2.2% whereas adjusted EBITDA earnings earlier than curiosity, taxes, depreciation, and amortization) rose 0.9%. If we regulate for the Ziply Fiber acquisition, the U.S. enterprise BCE acquired final 12 months, EBITDA was flat.
BCE’s postpaid churn improved to 1.1%, which is the bottom Q3 studying in 4 years.
BCE forecasts free money move between $2.1 billion and $2.3 billion in 2026. Comparatively, its dividend expense is round $1.6 billion, which interprets to a payout ratio of 75% on the midpoint FCF estimate. It’s effectively above BCE’s payout goal of 40% to 55%.
The Saskatchewan AI knowledge centre may weigh closely on BCE’s dividend payout ratio, which is already elevated.
Capital spending is rising as a result of BCE is constructing each the Saskatchewan AI knowledge centre and Ziply’s U.S. fibre community. CEO Mirko Bibic says Bell AI Material, the info centre enterprise, is on monitor to be an over $500 million EBITDA enterprise based mostly on contracts signed to date.
Telus Q3 outcomes: A smaller dividend, however shrinking money move
In Q3 2026, Telus reported free money move of $396 million, down 35% 12 months over 12 months. Its adjusted EBITDA fell by 5% to $1.8 billion, whereas adjusted earnings per share slid from $0.24 to $0.16. Telus additionally booked an $800 million noncash write-down on its Well being unit.
The annual dividend expense for Telus is round $1.2 billion, whereas it forecasts free money move at $1.8 billion this 12 months, indicating a payout ratio of 65% however increased than its goal of 45% to 60%.
Telus targets $900 million in annual money financial savings by the tip of 2028, and administration has additionally pointed to free money move development of at the least 10% a 12 months in 2027 and 2028.
Telus has the sting on protection in the present day. Its payout for the Canadian dividend inventory sits about 5 factors above its goal, whereas BCE’s sits 16 factors increased. Nonetheless, the expansion estimates for BCE are much more enticing.
Analysts forecast free money move for Telus to extend from $1.8 billion in 2026 to $2.4 billion in 2028. If Telus inventory is priced at 10 occasions ahead FCF, it may return round 29% over the following 12 months, after adjusting for dividends.
Analysts forecast free money move for BCE to extend from $2.1 billion in 2026 to $3.9 billion in 2028. If BCE inventory is priced at 10 occasions ahead FCF, it may return round 40% over the following 12 months, after adjusting for dividends.
