1 Magnificent Canadian Stock Down 17% to Buy and Hold for Decades

For years, investors treated telecom stocks like steady income machines. Pay the bill, use the phone, stream the show, complain about the bill, repeat forever. Then rates rose, competition tightened, debt got heavier, and suddenly the “safe” corner of the TSX looked a lot less cozy.

That reset creates the opportunity. The CRTC’s 2026 Canadian Telecommunications Market Report showed Canada’s telecom service sector generated $59.6 billion in 2024, unchanged from 2023. Mobile revenues rose 2.1%, but fixed internet barely grew, and older services kept shrinking. This is not a sleepy growth market anymore. It is a battle for customers, networks, and cash flow.

So investors need to ask a sharper question. Which beaten-down telecom can still earn its way through the next decade?

BCE

BCE (TSX:BCE) deserves a look. Shares recently traded around $30.25, below their 52-week high of $36.25. That puts the stock down about 17% from that high. It’s not a catastrophic collapse from the past year’s peak, but it still shows how little enthusiasm investors have for the stock right now.

BCE stock owns Bell Canada, one of the country’s largest communications businesses. It provides wireless, internet, TV, media, business communications, cybersecurity, and cloud services. In normal-person terms, BCE sells the pipes, signals, screens, and services that keep households and businesses connected. Very glamorous, if your definition of glamour includes routers.

Yet the reason BCE stock can still work as a long-term holding comes from infrastructure. Canada needs fibre, wireless coverage, data centres, cybersecurity, and enterprise connectivity. That demand does not disappear because investors are grumpy about telecom margins.

Into earnings

BCE stock’s first-quarter results showed the business still has life. Adjusted earnings before interest, taxes, depreciation and amortization (EBITDA) grew 2.9% to $2.6 billion, while free cash flow increased 0.8% to $804 million. The company also pointed to 113% growth in artificial-intelligence (AI)-powered solutions revenue in Bell Business Markets, driven by demand for Ateko, Bell Cyber, and Bell AI Fabric.

That is the number investors should watch. BCE stock needs cash flow to fund its network, pay debt, invest in AI infrastructure, and support the dividend. The dividend story now looks more realistic, too. BCE stock declared a quarterly common-share dividend of $0.44 for July 2026, equal to $1.75 annually, yielding 5.8% at writing.

That lower dividend may still sting for longtime shareholders, especially after BCE stock previously guided to a much higher annualized payout of $3.99 for 2025. Yet a reset dividend can be healthier than an unsustainable one.

Looking ahead

The valuation looks more interesting after the pullback. A near-5.8% yield from a national telecom with fibre, wireless, media, and data-centre ambitions gives patient investors a reason to wait.

The risk is debt and execution. BCE stock still faces intense wireless and internet competition, regulatory pressure, high capital spending, and weaker free cash flow guidance because of its Saskatchewan AI data centre buildout. The company expects 2026 free cash flow to fall as it increases capital spending.

Still, decades-long investors do not need BCE stock to be perfect. They need the company to stabilize cash flow, grow fibre and enterprise services, and turn AI infrastructure from a spending story into a revenue story.

Bottom line

BCE stock is no longer the untouchable dividend darling some investors once imagined. That may be the point. A lower share price, reset payout, and stronger focus on fibre, AI, and business services could make today’s ugly chapter look like the start of a better long-term entry point.

The post 1 Magnificent Canadian Stock Down 17% to Buy and Hold for Decades appeared first on The Motley Fool Canada.

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More reading

• How $20,000 Across 4 TSX Stocks Can Deliver $1,000 in Passive Income
• What’s the Deal with Telus’s Dividend?
• Is Telus’s Dividend Still Worth Counting On?
• Why Chasing High Yields is the Fastest Way to Lose Money
• What Is Going On With BCE’s Dividend?

Fool contributor Amy Legate-Wolfe has no position in any of the stocks mentioned. The Motley Fool has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy.