Last year, BCE Inc investors got a rude awakening. When the company dropped its fourth-quarter 2024 earnings release, the dividend was hacked from $0.99 per share all the way down to $0.49. The stock plunged alongside the news. Officially, management pointed to an “unsupportive policy environment” and fears of a looming recession. But a quick look under the hood tells a much simpler story: the cash going out the door had simply outrun the cash coming in.
This is the brutal utility of the payout ratio—the slice of profits a company hands over to shareholders as dividends. When that percentage stays elevated for too long, or worse, crests above 100%, a high yield becomes a house of cards waiting to collapse. BCE’s 50% cut taught the market a painful lesson: today’s tempting yield can turn into tomorrow’s double whammy of a slashed dividend and a sinking stock price.
So, the question becomes: are there any TSX-listed high-yielders out there with both a generous spirit and a solid financial footing? There are. Here are three whose payout ratios stand up to scrutiny and whose yields are nothing to dismiss.
Rogers Communications (TSX: RCI.B) currently sports a payout ratio of just 13.2%. Last year, the company pulled in $6.9 billion in net income and set aside a mere $913 million for dividends. That leaves an enormous cushion in the bank. Despite this conservative approach to payouts, the stock still yields 4.2%.
When an ultra-low payout ratio meets a perfectly respectable dividend yield, it’s usually a sign of a cheap valuation. And Rogers checks that box clearly: the stock trades at 9.5 times earnings, 1.2 times sales, 1.5 times book value, and 12.4 times free cash flow. All these metrics sit below the TSX average, and they look even more favorable stacked up against peers like BCE and Telus.
The market’s broader pessimism toward the Canadian telecom sector—along with sluggish industry-wide profit growth—has created this price point. But when a stock gets cheap enough, you don’t necessarily need explosive growth to make holding it worthwhile. Rogers appears to fit that description.
Toronto-Dominion Bank (TSX: TD) offers a 3.2% dividend yield today. Earlier last year, that yield was brushing against 6%, but a substantial rally in the stock price has since compressed the yield percentage. Importantly, the actual dividend payout hasn’t shrunk.
After the U.S. Department of Justice capped the bank’s U.S. retail asset expansion, the market braced for a growth slowdown. Instead, both revenue and earnings have continued to grind higher. TD currently changes hands at about 15 times adjusted earnings and 1.9 times book value—levels that sit below the broader North American market average. Even after a robust rally in 2025, TD remains a holding that doesn’t keep you up at night.
Fortis (TSX: FTS) yields 3.3% with a payout ratio of 73%. That percentage is markedly higher than the first two names on this list, but within the context of the utility sector, it’s a model of moderation.
Utilities are notorious for stretching their payout ratios past the 100% mark, a practice that eventually leads to uncomfortable dividend resets—just as Algonquin Power demonstrated a few years back. Fortis has a long history of keeping its distributions within reason, refusing to overextend or fake it. The result is a smoother operational trajectory and, over the long arc, a more reliable total return.
Three different stocks, three distinct flavors of financial steadiness. BCE’s warning siren is still echoing across Bay Street. In today’s market, that kind of safety margin might be worth more than an extra percentage point or two of headline yield.
