As of October 20, 2026, shares of Canadian telecom giant BCE (TSX: BCE) remain mired near multi-year lows, down about 62% from their early-2022 peak. Although the company recently cut its dividend, the yield still stands at approximately 6.1% based on the current share price of about C$28, and the sustainability of the payout has improved compared with before. The market’s focus is on one question: Is this a deep-value stock worth buying on dips, or still a “falling knife” best left untouched?
BCE’s dividend was once a hot topic in the market. As the share price kept falling, its yield was at one point pushed into double digits, fueling concerns about the sustainability of the payout. Although the dividend has now been cut, a 6.1% yield remains attractive, and the safety of the payout has improved. At the same time, the company’s price-to-earnings (P/E) ratio is only slightly above 4x, placing the valuation in deep-value territory.
Canada’s telecom industry faces a potential threat from the rise of satellite connectivity. Elon Musk’s Starlink made notable progress in the industry this year. Although mobile data is unlikely to rely entirely on satellite transmission in the near term, such significant innovation undoubtedly introduces uncertainty into the industry’s outlook. That said, BCE’s potential catalysts also deserve attention: its AI data-centre projects are expected to gradually deliver value as the AI revolution advances. The first phase of the company’s Saskatchewan data centre is expected to move forward next year, and investors will be watching closely for its contribution to results.
Unlike some U.S. AI infrastructure developers, BCE has not taken an overly aggressive approach to data-centre construction, but it still has a substantial amount of debt on its balance sheet to address. The core concern of recent bears is precisely the risk of debt pressure and potentially rising interest rates. BCE needs to steadily advance its deleveraging targets and get free cash flow back on track before it can regain market confidence. The dividend cut is expected to accelerate this process to some extent.
On balance, BCE shares may not have bottomed yet, but the stock currently leans more toward “buy” than “sell,” especially now that AI-related catalysts have been successively put in place. These catalysts may not offset industry headwinds in the near term, but they do not need to fully offset them—as long as deleveraging and cash flow improvement are gradually delivered, the deep valuation and 6.1% dividend yield should provide a certain margin of safety for patient investors.
