Don’t Fall for BCE’s Dividend: Buy This Safer Yield Instead

This Vanguard high-yield dividend ETF pays monthly and is a better bet than BCE.

Some public data sources make BCE (TSX:BCE) stock fundamentals look far worse than they really are. For instance, Yahoo Finance currently reports a dividend payout ratio of 745.65%. If that number were accurate, it would imply BCE is paying out more than seven times its earnings—clearly unsustainable.

But that figure is misleading because Yahoo calculates payout ratios using net income, which doesn’t properly reflect cash flow in capital-intensive industries like utilities, telecoms, and pipelines.

For these sectors, investors should use a non-GAAP (generally accepted accounting principles) measure called distributable cash flow (DCF) instead. Based on that measure—and factoring in BCE’s recent dividend cut—its payout ratio sits closer to 75%, which is better, though not ideal.

The company’s current ratio of 0.61 and debt-to-equity ratio of 204% still raise concerns about balance sheet strength.

Author's summary: BCE's dividend yield is not as safe as it seems.

The Motley Fool Canada — 2025-10-22

Don’t Fall for BCE’s Dividend: Buy This Safer Yield Instead

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