For Canadian investors using a Tax-Free Savings Account (TFSA) to build a steady income stream, the choice between high yield and strong growth is a constant balance. Telecom giant Telus (T) offers a compelling proposition with its near-9% dividend yield, catering to those seeking immediate cash flow. However, a closer look reveals a potentially more cost-effective alternative for investors prioritizing value and dividend growth potential: Quebecor (QBR.B).
While Quebecor’s dividend yield of approximately 2.81% pales in comparison to Telus’s, its value and growth narrative presents a different kind of appeal. The stock trades at a trailing price-to-earnings (P/E) ratio of just 13.9x—a significant discount to Telus’s 24.4x multiple—even as Telus’s dividend growth has stalled.
Quebecor’s investment thesis is powered by aggressive market expansion, primarily through its Freedom Mobile brand. The company has been successful in capturing market share, a trend expected to continue narrowing the gap with larger rivals over the next four to five years. The market has rewarded this story: the stock soared nearly 57% over the past year, dramatically outperforming its major telecom peers. Despite a recent pullback of over 6% from its highs, the core growth narrative and the potential for earnings to fuel future dividend increases remain intact.
The growth story is validated by solid financials. In Q3 2025, Quebecor reported revenue of approximately $1.41 billion CAD and a 5.7% year-over-year increase in adjusted EBITDA to about $628 million CAD. Net income attributable to shareholders was $236 million CAD, or $1.03 per share.
Notably, free cash flow from operating activities surged about 18.7%. Management has also made significant progress in strengthening the balance sheet, reducing consolidated net debt by over $300 million CAD in the quarter and by roughly $700 million CAD over the past year. This brought the net leverage ratio down to about 3.03x, enhancing dividend security in a volatile interest rate environment.
Operationally, the telecom segment is shouldering the load, showing growth in adjusted EBITDA and mobile service revenue driven by customer additions. Network expansion in Quebec and growing Freedom Mobile coverage in Ontario underpin the long-term subscriber growth strategy. While its media arm adds diversification, it is best viewed as a cyclical complement rather than the primary investment driver.
Investors should note that Quebecor is not a sleepy substitute. It is a telecom-led business with a media component, meaning investors get a mix of recurring subscription revenue and more cyclical advertising income. The telecom sector remains fiercely competitive, with potential for swift pricing pressure. The company’s still-meaningful debt load also introduces sensitivity to interest rates and refinancing costs, and a softer ad market could weigh on sentiment.
Ultimately, Telus and Quebecor represent two distinct paths:
For TFSA investors crafting a “paycheque” portfolio, pairing the high yield of Telus with the growth-oriented value of Quebecor can be a strategic move to enhance long-term portfolio efficiency, balancing present income with future potential.
