2 Canadian Dividend Giants to Buy With Rates on Hold

The Bank of Canada’s overnight interest rate is currently 2.25%, and it has been on hold since October 2025 as economic and geopolitical uncertainty remain elevated. As always, the Bank of Canada continues to toe the line between keeping inflation in check and stimulating economic growth.

Right now, they’ve been hesitant to move either way, and interest rates have been unchanged for the last five consecutive meetings. The next meeting and decision will come on Wednesday, and economists expect it to mark the sixth consecutive meeting of unchanged interest rates.

So now investors are faced with a decision. With rates on hold, which Canadian dividend stocks should they buy?

Canadian telecom stocks

Things are settling after the upheaval in the Canadian telecommunications industry in recent years. We’ve seen declining revenue growth, stretched balance sheets, cash flow problems, and worst of all, changes in dividend policies. This, coming from two of the most well-respected and reliable Canadian dividend giants.

As a result, telecom stocks BCE Inc. (TSX:BCE) and Telus Corporation (TSX:T) have taken big hits – BCE cut its dividend, and Telus halted its dividend growth program. However, both BCE and Telus have been adapting. They continue to have industry advantages and are focusing on their own growth platforms to drive growth in the years to come.

With interest rates on hold, both heavily indebted companies have caught a break.

BCE

Over at BCE, the stock has buckled under the pressure of a changing regulatory environment. More competition has effectively sent mobile pricing lower, eating away at BCE’s mobile business. BCE’s stock price has been cut in half since 2023.

But this Canadian dividend giant has embarked on a plan: debt reduction, investing in higher-growth businesses, and returning to earnings growth. BCE stock’s most recent update demonstrated good progress on all these fronts.

Bell business markets is a leading Canadian provider of broadband network and communications services. It is a growth area for this telecom giant, and as such, the company is devoting less capital to its legacy business in favour of investing here. In the company’s latest quarter, Bell business markets saw its revenue increase 9.7%. This was driven by a 113% growth rate in artificial intelligence (AI)-powered solutions.

Bell stock is currently yielding 5.9%. With an improving balance sheet and growth drivers such as BCE’s AI-powered solutions and its U.S. Ziply acquisition, there is real hope for this dividend giant.

Telus

Like BCE, Telus has also suffered from the changed competitive landscape. The stock is down 45% from 2023 levels, and its dividend growth program has been halted.

But Telus has also diversified its business and has some growth drivers that look promising. For example, Telus’ wireline business delivers more than connectivity. It also offers smart home energy. This is a comprehensive home energy management service that tracks energy usage, automates energy savings routines, and provides tips and tricks. Telus also offers tech-enabled health care, and security offerings.

Telus’ recent first-quarter results show the promise of this reinvention. Operating revenue increased 1% to $5 billion, and adjusted earnings before interest, taxes, depreciation, and amortization (EBITDA) was flat at $1.8 billion. Also, free cash flow increased 19% to $583 million. Over at Telus Health, adjusted EBITDA increased 11%.  

Telus stock is currently yielding a very generous 11.4%.

The bottom line

As interest rates remain on hold, and as BCE and Telus stock continue to reinvent themselves, consider buying these two Canadian dividend stocks. Their elevated yields are extremely appealing, and they reflect investor skepticism and recent turmoil. However, for investors who are able to wait for balance sheet improvements and growth initiatives to yield the expected results, these yields are the ultimate reward.

The post 2 Canadian Dividend Giants to Buy With Rates on Hold appeared first on The Motley Fool Canada.

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More reading

• 1 TSX Dividend Stock to Consider While It’s Down 50%
• 1 Magnificent Canadian Stock Down 17% to Buy and Hold for Decades
• A 11.3% Passive-Income Stock I’d Put My Whole TFSA Contribution Into
• What’s the Deal with Rogers’s Dividend?
• How $20,000 Across 4 TSX Stocks Can Deliver $1,000 in Passive Income

Fool contributor Karen Thomas has positions in BCE and TELUS. The Motley Fool recommends TELUS. The Motley Fool has a disclosure policy.