CGO:CC - Got $2,000? 5 Telecom Stocks to Buy and Hold Forever
2025-02-25 16:30:00 ET
Canada’s telecom sector is a dividend oasis, offering utility-like cash flows and defensive appeal. While 2024’s price wars pressured revenues, the long-term case for telecoms remains intact: high yields, infrastructure moats, and pricing power. Here are five TSX telecom stocks to anchor your portfolio for decades.
Rogers Communications stock
Rogers Communications ( TSX:RCI.B ) stock is a $21.7 billion titan with a 5% dividend yield that’s currently appealing to long-term-oriented investors for its deleveraging potential. Despite a rough five-year return (-24.6%), its scale and spectrum assets position it to rebound as industry pricing stabilizes. Rogers’s recent focus on reducing debt could unlock dividend growth. Investors get paid to wait for a turnaround in Canada’s most extensive wireless network. Investors may expect 5-7% annual returns with dividend stability.
TELUS stock
TELUS ( TSX:T ) stock shines with a juicy 7.2% dividend yield and a rare 13.3% five-year total return among the Big Three. Its “growth crown” comes from TELUS Health and Agriculture, which grew earnings before interest and taxes, depreciation, and amortization (EBITDA) at double-digit rates in 2024, offsetting recent telecom volatility. With industry-low churn rates and strong telecom subscriber net additions, TELUS stock combines an attractive yield with innovation. Management targets sustaining a 5% annual EBITDA growth through 2025, backed by free cash flow growth, and a new dividend policy update for 2026 through 2028 will be out in May.
Juicy dividends may rain forever. With full dividend reinvesting (assuming a stable stock price), TELUS stock’s 7.2% dividend yield could double investors’ capital in 10 years — the Rule of 72 predicts.
BCE
BCE ( TSX:BCE ) stock’s eye-popping 11.6% yield comes with caveats—payouts have exceeded free cash flow generation capacity for some years now to signal risk. However, its expansive fibre network backbone (covering 75% of Canada) and a new acquisition in the United States provide long-term pricing power. While BCE stock’s negative 23.5% five-year total returns lag, its 60-year-lifespan fibre infrastructure is irreplaceable. Management is snatching customers via aggressive fibre bundling, offsetting wireless average revenue per user (ARPU) declines.
That said, BCE stock is a high-risk, high-reward yield play. Management may trim the dividend at any time.
Cogeco Inc.
Cogeco ( TSX:CGO ) stock’s 6.9% dividend is backed by a fortress balance sheet and a 37% earnings payout ratio, with some U.S. cash flow diversification. While revenue growth has been modest, with a compound annual growth rate of 4.5% over the past five years, dividends surged 14.6% annually since 2020. Its investee Cogeco Communications’s expansion into U.S. rural broadband adds growth optionality, yet Cogeco Inc.’s enterprise value-to-EBITDA (EV/EBITDA) multiple of 5.7 and a price-to-free cash flow (P/FCF) multiple of 1.3 scream value for long-term-oriented investors.
Quebecor
Quebecor ( TSX:QBR.B ) is a regional disruptor, delivering a 21% five-year total return while most peers faltered. Its 4% yield looks sustainable with a 41% payout ratio, and its recent wireless growth is explosive. Interestingly, Chief Executive Officer Pierre Karl Péladeau’s focus on undercutting the Big Three telecom giants seems to be working, driving double-digit wireless EBITDA growth during the third quarter. Trading at 6.6 times EV/EBITDA, Quebecor stock remains a hidden telecom sector gem.
Foolish bottom line
Telecoms are built for the long game. You may allocate $2,000 across these Canadian telecom stocks, prioritizing TELUS and Quebecor for growth-yield balance, BCE and Cogeco for yield, and Rogers for balance-sheet turnaround potential. Reinvest dividends, and let compound growth work its magic.
The post Got $2,000? 5 Telecom Stocks to Buy and Hold Forever appeared first on The Motley Fool Canada .
Fool contributor Brian Paradza has no position in any of the stocks mentioned. The Motley Fool recommends Cogeco Communications, Rogers Communications, and TELUS. The Motley Fool has a disclosure policy .
2025