Both are out of favour for real reasons - heavy debt loads, a competitive pricing war that has structurally impaired their cash flows, and paused dividend growth. BCE already cut its dividend 56% in 2025 and is now focused on deleveraging; Telus still carries a yield above 10%, but that number itself is a warning sign rather than an opportunity, as dividend cut risk is genuine with a new CEO stepping in and free cash flow under pressure.
If the goal is reliable cash flow, we feel BCE is the safer of the two today - the dividend was reset to a level that is well covered at roughly 50% of free cash flow, and the balance sheet has more breathing room. Telus looks cheap, but the yield is elevated for a reason and we would want to see more clarity on dividend sustainability before getting comfortable. While we do not think that much can be expected in the way of capital appreciation, for income-focused investors, BCE is the more defensible hold.