$BCE

BCE is shifting focus from traditional telecom to AI, raising concerns about dividend sustainability. Its AI fabric, built on fiber infrastructure, is driving wireline data revenue growth. BCE has cut its dividend payout ratio and paused growth to fund the transition. The company aims to reduce net debt to 3.0x EBITDA by 2028. Investors should monitor the timeline for AI-driven cash flow growth, as the current dividend yield is 5.37%.

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.

BCE Inc. shares rose 10.2% over the past month. In Q2, BCE reported adjusted EPS up 3.2% YoY, beating consensus by 2.2%, and operating revenues up 1.5% above expectations. Capex rose 41.5% to C$1.08B, free cash flow fell 9.5% to C$1.04B, and net debt leverage was about 3.7X. The article cites Zacks Rank #4.

The TSX rose to another all-time high, closing up 17.59 points at 36,475.92, led by utilities and telecoms. BCE gained after BofA raised it to buy, and Cargojet jumped on a second-quarter revenue beat. Brookfield Renewable Partners and Brookfield Infrastructure also rose. The Canadian dollar edged up to 71.82 U.S. cents.

Canada’s TSX hit a record intraday high, rising 103.83 points to 36,562.16, as a report said the US and Iran were nearing a deal to end their conflict. Telecoms led, with BCE up 3.4% to $32.43 after BofA raised it to buy. Cargojet gained 6.3% to $91.70 after a Q2 revenue beat.

A roundup of Wall Street analyst actions includes UBS upgrading Jabil to Buy, initiating Lincoln Electric and Century Aluminum with price targets, and Bernstein initiating PDF Solutions. JPMorgan reiterates Nvidia overweight and raises CoreWeave to $110. Other changes include Loop lowering Apple to $340, Truist upgrading Best Buy to $95, and Argus upgrading Boeing to buy.

The article cites Goldman Sachs Research estimating global AI investment could reach $1T in 2026, including $581B in the US, and U.S. AI capex as a share of GDP rising from 1.8% (2026) to 2.8% (2028). It highlights BCE’s Bell AI fabric, including a $1.7B, 300-megawatt data center in Saskatchewan targeting $500M annual revenue and $400M EBITDA by end-2027, and partners Hive, Celestica, and Bird Construction.

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.

Telus reported a $1.8B common-shareholder loss for the quarter ended June 30, versus a $7M profit a year earlier. Adjusted earnings were 16 cents per share, down from 22 cents. Telus declared a 18 cents dividend payable Oct. 1. Shopify, Suncor, Thomson Reuters, RioCan and Sun Life also reported Q2 results and outlook updates.