BCE's Transition: From Dividends to AI Growth Uncertainty

Scotiabank analyst Maher Yaghi recommends BCE Inc. (BCE-T) for its AI exposure through a Saskatchewan data centre, citing favorable economics and a $40 target. Separately, Scotiabank notes narrow TSX leadership driven by gold stocks. Meta Platforms (META-Q) agreed to a $18B fine and teen-safety measures, with BofA Securities viewing it positively.

BCE Inc. (TSX:BCE) offers a 5.35% dividend yield, with Q2 2026 operating cash flow up 11% YoY to C$2.162B. Free cash flow was C$1.042B, down due to increased capital spending. BCE targets C$2.1B–C$2.3B free cash flow for 2026, with dividend payout at 40%–55% of free cash flow. Dividend sustainability depends on cash flow recovery and debt reduction.

Ontario’s University Pension Plan Ontario (UPP) hired lawyer Gale Rubenstein as chair and first employee, initially overseeing about $10 billion for University of Toronto, Queen’s University, and University of Guelph staff, with ambitions to expand. Separately, CNBC and others discuss an AI hedge fund’s losses and CPP Investments’ benchmark analysis. BCE also agreed to buy Ziply Fiber for $5 billion.

A roundup of analyst actions in Canada’s telecom and transportation sectors. Raymond James initiated coverage of the telecom industry and set BCE at “market perform” with a C$37 target, Quebecor at “market perform” C$72, Rogers at “outperform” C$68, and Telus at “market perform” C$18.50. TD Cowen downgraded Rockpoint Gas Storage to “hold” (C$32). National Bank raised NFI Group to C$29. Scotiabank upgraded TFI International to “sector outperform” with a C$260 target.

HIVE Digital Technologies (HIVE) said it signed a three-year, US$220 million AI infrastructure deal with Bell Canada and Cohere to build an integrated Canadian AI platform, combining Bell’s data centre services, Cohere’s software and HIVE/BUZZ GPU cloud and server capabilities. BUZZ will buy 2,304 NVIDIA Grace Blackwell GPUs for deployment in Merritt, BC. HIVE shares last traded at C$5.62.

BCE’s dividend has shifted from a long-running “stable” payout to a new, lower level after the company cut its annualized common dividend to $1.75 per share from $3.99, leaving a yield around 5.1% (at the time of writing). BCE reported Q1 2026 operating revenue of $6.2 billion (+4% y/y), adjusted EBITDA of $2.6 billion (+2.9%), and free cash flow of $804 million (+0.8%), according to the article. The piece links the cut to higher interest costs, capital needs, and competition, while noting asset