What are we looking for?
With all that is happening globally and within North America, we want to continue holding our dividend paying stocks as a safety net while we wait out the events. One area well known for its yield is the Canadian telecom sector. The list is limited in Canada, and the companies’ share prices can move in opposite directions at times but all are up year-to-date from 3 to 13 per cent. What are we seeing for valuations here?
The screen
We used StockCalc’s screener to select the top eight listed telecom stocks by market capitalization on the TSX. We then used StockCalc’s valuation tools to calculate fundamental (or intrinsic) valuation for each stock to see if it is undervalued or overvalued compared with its price. Overview of the techniques used:
- Discounted cash flow (DCF value) is a valuation technique in which cash-flow projections are discounted back to the present to calculate value per share;
- A price comparables (price comps) technique values the company on the basis of ratios from selected comparable companies;
- An adjusted book value (ABV) is calculated by multiplying book value per share by its 10-year average price-to-book ratio.
- If we have analyst coverage, we may consider the consensus target price.
More about StockCalc
StockCalc is a fundamental valuation platform with tools to calculate and report on value per share for thousands of public companies listed on major North American stock exchanges. StockCalc also contains numerous tools to understand what the stocks you are investing in are worth. Globe Unlimited subscribers can subscribe to StockCalc using the promo code ‘Globe30,’ which offers a 30-day free trial and special pricing for the second month.
What we found
You can see in the accompanying table the percentage difference between each stock’s recent close price and its intrinsic value. The “StockCalc valuation” column is a weighted calculation derived from our models and analyst target data, if used.
The Canadian telecom industry has shifted from a simple safe yield and steady growth story to a more selective one. The biggest near-term drivers include slower industry subscriber growth with reduced immigration, regulatory pressure that supports more price competition and balance-sheet discipline after heavy fibre/5G spending. At the macro level, the Bank of Canada’s policy rate is now 2.25 per cent, down materially from 2024 levels, which helps financing conditions, but it has not removed pressure from these leverage-heavy operators.
CRTC’s 2026 market report says about 72 per cent of Canadian households now have access to fibre at home, which is good for long-run network quality, but also means the easy deployment phase is behind the industry. Emerging trends in the telecom sector include a shift toward monetizing 5G capabilities rather than simply expanding coverage, the growing viability of satellite-to-cell services for rural connectivity, the integration of AI into telecom operations and services, and the continued importance of fibre infrastructure as a widely deployed backbone of modern networks. Let’s look at a few of the companies involved:
In May, 2025, BCE BCE-T cut its annualized common dividend to $1.75 from $3.99, and reset its dividend payout policy lower to preserve cash and deleverage. In February, 2026, it reaffirmed the current quarterly dividend of 43.75 cents and kept the annualized dividend at $1.75 for 2026. BCE is now working on a turnaround story based on cost cuts, AI/enterprise solutions, and its U.S. fibre expansion via Ziply Fiber. BCE has raised its 2028 cost-savings target to $1.5-billion and has said it does not expect dividend growth until leverage improves. For income investors, BCE still yields around 5 per cent but it is no longer the annual dividend increaser it once was. Our weighted model shows BCE to be fairly valued.
Cogeco Communications Inc. CCA-T is a more cable- and broadband-oriented operator. It launched its wireless service in Canada in 2025 and has expanded that rollout since. In January, 2026, it increased its quarterly dividend 7 per cent to 98.7 cents from 92.2 cents. Cogeco is moving from a cable-only profile toward offering a broader bundle with mobile, which could improve retention and monetization. Cogeco Inc. CGO-T is the parent company holding 82 per cent of Cogeco Communications Inc., the operating telecom and cable company. Our weighted models show upside to both CCA-T and CGO-T.
Other notes include Telus T-T pausing its dividend growth until the share price better reflects growth prospects, Rogers RCI-B-T keeping its dividend flat at 50 cents quarterly into 2026, Quebecor QBR-B-T increasing its quarterly dividend 14.3 per cent to 40 cents from 35 cents and I added Terago TGO-T and Sangoma STC-T to the list, although they are not part of the core Canadian telecom basket.
Investing involves risk. StockCalc accepts no liability whatsoever for any loss or damage arising from the use of this analysis.
Brian Donovan, CBV, is the president of StockCalc, a Canadian fintech based in Miramichi, N.B.