Better Dividend Stocks for 2026: BCE or Telus?

It’s the time of year when you say goodbye to 2025 and plan your investments for 2026. In your dividend portfolio, the common question is whether you should accumulate more shares B.C (TSX:BCE). BCE was a stock that cut dividends by 56% and made a costly acquisition at a time when market share was shrinking, revenues were down, and debt was sky-high. Should these challenges be taken as a sign of weakness or as the beginning of the next chapter of growth following a company-wide restructuring?

Better dividend stock for 2026: BCE or Telus?

Between B.C. and Telus Corporation (TSX:T), Telus has stable revenue and dividend growth and is focused on reducing debt. But is it enough to maintain dividends? The stocks with a better dividend depend on your investment objective.

Telus Stock

If you’re looking for immediate passive income because you’re retiring or have new expenses, Telus is a better dividend stock for 2026.

Keep in mind that every year is different for different companies. That’s how business cycles work. 2026 is the year for Telus as management increased the January 2026 dividend by 4%. The company has reduced its capital expenditure and sold its 49.9% equity stake in wireless tower operator Terrion for $1.3 billion and used some of the proceeds to reduce debt.

In the third quarter of 2025, Telus reduced its net debt to earnings before interest, taxes, depreciation and amortization (EBITDA) to 3.5 times, compared to the previous year’s quarter. It has also increased its free cash flow, maintaining a comfortable dividend payout of 75%. The ratios favor Telus as it has the financial flexibility to maintain its current dividends and grow them within the range of 3 to 8% as guided by the company’s management.

BCE stock

Is there a compelling investment case for BCE? Should existing shareholders continue to hold these shares?

The company’s restructuring efforts, from telecom to techno, are gradually taking shape. BCE has acquired Ziply Fiber and is seeing an increase in revenue from digital video advertising and artificial intelligence (AI)-powered business solutions such as Aetko and Bell Cyber. However, the decline in conventional fixed telephony and radio activities continues to put pressure on profits and free cash flow.

BCE has halved its dividend to focus on debt repayment and restructuring. This will take more time as a challenging macro environment, high debt and price competition have delayed the outcome of the restructuring. BCE is having difficulty finding the right buyer for parts of its activities.

Although BCE’s struggles have weakened its current financial situation, the company has the potential to grow with technology. The company will focus on deleveraging as it could see no dividend growth in the next two years.

However, BCE’s efforts to build AI Fabric and expand to other high-growth companies could help the company drive dividend growth in the long term. Those who own BCE stock and have a long investment horizon may continue to hold on to it for its 5-6% dividend yield and future price appreciation as the tech industry gains momentum.

What is better for returns in 2026?

For 2026 investing, Telus is a better buy because you can lock in a 9.3% dividend yield, use the Dividend Reinvestment Plan (DRIP) option, and enjoy 4% dividend growth. However, BCE is a growth and dividend stock for long-term growth and AI capabilities. The dividend yield will be around 5.3%, with no dividend growth expected in the coming years. However, the DRIP option continues.