After Dividend Freezes and Cuts, Which Telecom Stock Is the Better Buy in January 2026?

Canada’s telecom stocks have long been regarded as reliable defensive picks. But that historical view of telecom stocks has changed in recent years, leading investors to question whether that still stands true.

Specifically, a wave of dividend freezes and cuts has hit Canada’s major telecoms in different ways. That steady dividend growth came while the telecoms invested heavily in rolling out 5G and fibre networks, while expanding spectrum.

This put pressure on payout ratios, which was also compounded by the rise in interest rates over the past few years. As the stock prices stalled, then dropped, yields began to rise.

Ultimately, this led Canada’s big telecom stocks, BCE (TSX:BCE), Telus (TSX:T) and Rogers Communications (TSX:RCI.B) to alter their payouts, freeze dividend growth, or scale back discounted DRIP programs.

This has questioned which of the big telecoms is a suitable investment right now, particularly among new investors.

Let’s try to answer that by taking a look at what each telecom stock can offer.

A temporary pause to a high-yield dividend

The first telecom stock to mention is Telus. Of the big three telecoms, Telus has the largest dividend yield. As of the time of writing, Telus offers a quarterly payout that carries an 8.8% yield.

Late last year, Telus announced it was pausing its semi-annual dividend increases. Before that pause, Telus had provided investors with annual or better increases for two decades.

While that dividend remains paused, Telus plans to focus on stabilizing its balance sheet. Telus’ decision to pause increases reflects pressure on its payout ratio and balance sheet, amplified by a weaker share price.

Some of the changes that Telus has moved to implement include scaling down its discounted DRIP program to reduce dilution and preserve cash.  

Does this mean Telus is still a telecom to invest in? For investors seeking income, Telus remains an attractive option. The caveat there is that investors may not see further growth from that dividend until the stock price recovers.

As of the time of writing, Telus’ stock is down 7% over the trailing 12-month period, and down nearly 30% over the past five years.

Holding steady when it comes to yields and growth

The next telecom stock to consider is Rogers. Rogers suspended its annual increases several years ago. Since then, the telecom has opted to raise its dividend only when conditions allowed.

In other words, Rogers has prioritized paying down debt and investing in growth over providing dividend upticks. As of the time of writing, Rogers offers a dividend of 4%.

That dividend comes in lower than its peers, but it also offers a more conservative payout ratio and a history of uninterrupted payments.

Like Telus, Rogers has reduced its DRIP discount to redirect more cash toward network investments.

For investors seeking a steady income from a telecom stock with an improving balance sheet, Rogers may represent a viable option.

A big dividend cut comes with a cleaner balance sheet

The last of the big telecom stock options to consider is BCE. BCE provided investors with a massive yield, promising investors steady growth for years. After the impact of rising interest rates finally compounded rising debt and sent its payout to unsustainable levels, BCE responded by slashing its dividend.

BCE implemented a 56% dividend cut. That leaves the payout at $1.75 per share, or a yield of 5.1%. BCE’s axe didn’t stop with the dividend. The company moved to slash costs across the board and even divest from other assets.

That included BCE selling off its stake in MLSE, which it used to invest in growth initiatives such as its Ziply Fiber acquisition.

The trade-off for investors is that BCE no longer has the high yield it previously did, nor can it offer annual upticks. In exchange for that cut, BCE now has a lower payout that allows it to continue investing in growing its core business.

Which telecom stock should you buy?

Prospective investors considering a telecom stock to buy have a choice of options.

Those who prioritize yield will lean towards Telus. Investors who seek safety may find Rogers more appealing. Finally, those who want to see growth may find BCE the best investment.

Ultimately, the better telecom stock depends on whether an investor prioritizes yield, stability, or long‑term balance‑sheet repair.

The post After Dividend Freezes and Cuts, Which Telecom Stock Is the Better Buy in January 2026? appeared first on The Motley Fool Canada.

Should you invest $1,000 in BCE Inc. right now?

Before you buy stock in BCE Inc., consider this:

The Motley Fool Canada team has identified what they believe are the top 10 TSX stocks for 2026… and BCE Inc. wasn’t one of them. The 10 stocks that made the cut could potentially produce monster returns in the coming years.

Consider MercadoLibre, which we first recommended on January 8, 2014 … if you invested $1,000 in the “eBay of Latin America” at the time of our recommendation, you’d have $21,827.88!*

Now, it’s worth noting Stock Advisor Canada’s total average return is 102%* – a market-crushing outperformance compared to 81%* for the S&P/TSX Composite Index. Don’t miss out on our top 10 stocks, available when you join our mailing list!

Get the 10 stocks instantly #start_btn6 { background: #0e6d04 none repeat scroll 0 0; color: #fff; font-size: 1.2em; font-family: 'Montserrat', sans-serif; font-weight: 600; height: auto; line-height: 1.2em; margin: 30px 0; max-width: 350px; text-align: center; width: auto; box-shadow: 0 1px 0 rgba(0, 0, 0, 0.5), 0 1px 0 #fff inset, 0 0 2px rgba(0, 0, 0, 0.2); border-radius: 5px; } #start_btn6 a { color: #fff; display: block; padding: 20px; padding-right:1em; padding-left:1em; } #start_btn6 a:hover { background: #FFE300 none repeat scroll 0 0; color: #000; } @media (max-width: 480px) { div#start_btn6 { font-size:1.1em; max-width: 320px;} } margin_bottom_5 { margin-bottom:5px; } margin_top_10 { margin-top:10px; }

* Returns as of January 15th, 2026

More reading

• 2 of the Best TSX Stocks to Buy Before They Start to Recover
• 5 Dividend Stocks Everyone Should Own
• Time to Sell BCE for This Higher-Yielding Choice?
• 3 Canadian Stocks That Paid Record Dividends in 2025
• Is Rogers Stock a Buy Under $40?

Fool contributor Demetris Afxentiou has positions in BCE. The Motley Fool recommends Rogers Communications and TELUS. The Motley Fool has a disclosure policy.