1 Dividend Great I’d Buy Over Telus or BCE Stock Today

There isn’t all that much to pick from if you’re looking for a high-yielder that’s going for cheap, especially if you’re keen on a bank stock, an insurer, or a miner. We’ve seen a lot of appreciation, and while things will eventually get overstretched if they aren’t already, I still think that staying the course and considering some of the names in the deep-value bargain bin is a wise move, provided you can stomach the added risk and volatility.

The telecom industry has been under pressure for many years now, and it’s easy to throw in the towel and move on to a name that’s actually able to post gains that keep up with (or even top) the TSX Index. There are real headwinds facing telecom these days, and Elon Musk’s Starlink, alongside other rising satellite connectivity plays, introduces a whole new layer of uncertainty regarding the future of how we’ll all get our data.

It’s been tough on the telecoms, but that’s where the yield’s at!

Indeed, beaming data from a satellite in space is a thing of science fiction. But as SpaceX goes private and other firms look to invest in their own constellations, questions linger as to what the pricing power of the incumbent telecoms will play.

Either way, many of the names have already partnered up to get in on the satellite connectivity boom. In any case, it’s the firm that owns the constellation itself that stands out as having the widest economic moat of all. In the meantime, don’t expect cell towers and traditional connectivity solutions to nosedive overnight.

At the end of the day, there are ways for telecoms to cut costs and improve the margin mix in this new, slower-growth world. Add the recent pivots towards higher-growth areas (most notably AI data centres) and I think it’s a mistake to give up on the telecoms as they look to gather some strength for a change.

Enbridge looks like a more predictable dividend grower

While Telus and BCE are still great companies with yields that are getting too good to ignore, I think I’d much rather be in the likes of an Enbridge (TSX:ENB). The midstream energy business, in my view, is far more predictable, especially when you consider the gas demand from the AI data centre boom and the need for more pipelines across the continent. The impressive backlog also clears the air on the earnings to come and allows the management team to stay incredibly generous with the shareholder return program.

Also, demand for crude transportation seems to be a few steps ahead of supply. As North American energy infrastructure becomes even more vital, I just don’t see a scenario where Enbridge takes another big hit to the chin. It’s a fantastic business with huge cash flows and greater dividend growth predictability. Also, the yield is still quite decent at 5%. Though, I’m sure many investors are feeling sad that the days of 5% yields have ended, at least for now. A pullback could change that, and if we are dealt one, I’d be looking closely at the name.

For now, the dividend can’t stack up against Telus’ 10% yield. But it’s in the same league as BCE’s 5.3% yield. With robust tailwinds at its back, Enbridge looks like the better bet. Though the price of admission has become that much steeper.

The post 1 Dividend Great I’d Buy Over Telus or BCE Stock Today appeared first on The Motley Fool Canada.

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More reading

• Got $21,000? A Dividend Stock Worth Buying in a TFSA
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• Enbridge: Buy, Sell, or Hold in 2026?

Fool contributor Joey Frenette has no position in any of the stocks mentioned. The Motley Fool recommends Enbridge and TELUS. The Motley Fool has a disclosure policy.