BCE has raised dividends consistently since 2009, the 10-year dividend growth rate is around 5%. BCE net debt/EBITDA is currently at 3.9x, which is slightly higher than BCE’s historical leverage levels, but still on par with industry levels.
The dividend in the trailing twelve months is around $3.7B, which is covered by the operating cash flow of $7.6B, with capex expected to come down this year, we think the prospect for BCE is decent (but could change in the future if conditions change).
T also grew dividends at a healthy pace over the years. The dividend in the trailing twelve months is around $1.5B, which is covered by the operating cash flow of $5B, however, the net debt/EBITDA level is slightly higher which is currently at 5.2x. We think T’s dividend could be okay, but the prospect for strong dividend growth in the near term from the current levels is quite limited.
We prefer BCE for the dividend name in the telecom space. But we don't think either dividend is at any imminent risk.