BCE (TSX:BCE) and TELUS (Tsx:t) had been the perfect shares to purchase for passive earnings for some a long time. They provided regular, juicy dividend yields, till elevated rates of interest, disruptive aggressive worth wars, and regulatory modifications shifted the Canadian telecommunications sector’s funding panorama. Following BCE inventory’s dividend minimize in 2025, and TELUS inventory’s suspended dividend development plan in the course of the previous yr, buyers in 2026 look past the dividend yields
Each BCE and TELUS are navigating restructuring years, and their restoration paths might diverge. Let’s see which of the 2 TSX dividend shares may very well be a greater purchase for whole returns this yr.
BCE vs. TELUS: An upfront yield actuality verify
Essentially the most placing distinction between TELUS and BCE inventory immediately is the huge yield hole. Following BCE’s large 56% dividend minimize in mid-2025, it’s now not the yield king.
| Metric (Feb 9, 2026) | BCE (BCE) | TELUS (T) |
| Present Yield | 5% | 8.6% |
| Annual Dividend | $1.75 | $1.67 |
| Dividend Standing | Rebased in 2025. Flat for 2026. | Progress on maintain. |
| FCF Steerage | 4%–10% Progress | >10% Progress |
| FCF Payout Charge (2026 Estimate) | 47% –50% | 75% |
| Web Debt/Adj EBITDA (leverage). | 3.8 | 3.4 |
Whereas TELUS inventory provides an upfront yield benefit over BCE for 2026, with a dividend yield towering above 8.6%, BCE inventory’s 5% dividend is properly coated by distributable money circulate given a 50% payout fee for 2026.
Though BCE nonetheless employs greater leverage in 2026, with a leverage ratio close to 3.8, the corporate’s dividend reset gave it respiration room going ahead. It’s paying out simply half of its money circulate to shareholders in dividends and has extra capability to pay down debt sooner.
Ought to BCE beat TELUS to the deleveraging race this yr, BCE inventory worth may rebound to generate constructive capital beneficial properties for buyers. Optimistic capital beneficial properties and a 5% dividend yield might mix to match or exceed TELUS inventory’s whole returns for this yr.
Nevertheless, inventory costs often take random walks, and in case your confidence in BCE inventory’s potential capital beneficial properties in 2026 is low, TELUS’s dividend yield provides superior “certainty” as a direct money return for the yr.
Furthermore, in the event you intend to carry the TSX dividend shares for the subsequent decade, and by no means promote, TELUS’s dividend yield may greater than double your capital in simply over eight years, the Rule of 72 “assures” buyers.
BCE’s possibilities to outperform TELUS in 2026
BCE took its medication in 2025. By slashing its dividend and buying Ziply Fiber within the U.S., administration has pivoted towards a lower-payout, higher-growth mannequin. With a low free money circulate payout fee, the BCE dividend is arguably the most secure it has been in a decade. Administration might comfortably guess on its U.S. development technique and synthetic intelligence-powered enterprise options (which grew income by 60% in 2025) to drive the subsequent leg of income and money circulate development.
That mentioned, given administration’s newest steerage for a 5%–11% drop in earnings in 2026 as the corporate integrates acquisitions and battles a slowing Canadian wi-fi and promoting market, decrease profitability might considerably take a look at the market’s confidence and valuation for BCE inventory, reducing the share worth additional.
TELUS inventory: An effectivity play
Whereas BCE slashed dividends and “starved” earnings buyers in 2025, TELUS selected a unique strategic path. As an alternative of a dividend minimize, administration opted for a dividend freeze whereas deleveraging and rising free money circulate by means of non-core asset gross sales.
TELUS provides an enormous yield benefit immediately, and its well being and synthetic intelligence (AI) enterprise segments stay high-potential development drivers with potential for profitable spinoffs.
That mentioned, TELUS’s 8.6% yield alerts market skepticism. If free money circulate (FCF) doesn’t hit 2026 targets, the dividend freeze may ultimately flip right into a painful minimize.
Investor takeaway
So which Canadian telecom inventory is the higher purchase for 2026? BCE inventory may do properly for conservative buyers after its dividend reset frees up money circulate to permit administration to restore its stability sheet. In the meantime, TELUS may very well be a rewarding high-yield dividend play for opportunistic earnings. For those who consider TELUS can hit its 2027 leverage targets and not using a dividend minimize, it’s possible you’ll lock in a generational yield with important capital upside.