HI there,
Speaking specifically to Telus vs BCE - there is a reason why we have Telus as a Foundational stock and not BCE. In our opinion, it is much better suited moving forward. Not only from a dividend coverage perspective but from a growth one as well. BCE had a rough quarter recently and cash flows are a concern. We don't think a dividend cut is on the horizon, but we certainly do not feel as though it is on solid footing. BELL's media business is a cash drainer and requires a ton of investment, which is negatively impacting the company. Whereas TELUS' non-telecom verticals such as TELUS Health, Agriculture and TELUS International provide better avenues for growth. TELUS is also in a better position cash flow wise. Worth noting that while TELUS' cash flow does not cover the dividend today but this was expected because they accelerated some investments and restructuring into 2023 and 2024. As that starts to normalize, you can see a clear path towards a sustainable payout ratio against FCF. That path is not as clear for BCE - which is why we are not as confident in that dividend - which is one of the main reasons why investors hold BCE.
Personally, I own TELUS and if were to buy one today, it would still be TELUS. I feel more confident in their ability to sustain that dividend and because I view their non-traditional telecom verticals has having more growth potential.
Mat
In terms of these two – to be honest – not much separates them. If you look at their charts, their performance and valuations tend to track each other over the long-term. So personally, if i owned one or the other (I own neither at the moment) then I wouldn’t switch one for the other. I’d keep which ever I had. HD has outperformed LOW YTD and over the past 1YR and as such, LOW valuation looks a little better today. That said, very little separates them across future growth expectations (maybe HD yield stands out as being higher and HD’s cash flow is better) either so, honestly – i’d be ok with either of these companies.