In late 2025, financial analysts increasingly favor Great-West Lifeco (GWO) over BCE Inc. (BCE) as a more resilient dividend stock, reflecting a broader shift among income-focused investors toward sustainability rather than headline yield. While BCE has long been considered a dividend heavyweight, rising costs, heavy capital expenditure demands, and a stretched balance sheet have raised fresh concerns about the durability of its payouts.
Great-West Lifeco’s appeal lies in its stronger cash flow coverage and disciplined capital allocation. The insurer maintains a conservative payout ratio of roughly 46% to 55% of base earnings, giving it flexibility to sustain and gradually grow dividends even in uncertain economic conditions. By contrast, BCE’s payout ratio has historically exceeded 90%, leaving little room to absorb shocks at a time when debt levels and financing costs remain elevated.
Earnings momentum has further widened the gap. In the third quarter of 2025, Great-West reported double-digit growth in base earnings, supported by robust performance in its U.S. retirement services and wealth management businesses. BCE, meanwhile, has faced earnings pressure from higher interest rates and what management has described as relentless capital spending needs to maintain and upgrade its telecom infrastructure.
Yield comparisons also tell a more nuanced story. As of December 2025, Great-West offers a lower but steadier forward dividend yield of about 3.6%, underpinned by diversified and growing earnings streams. BCE’s yield, ranging between roughly 5.4% and 7.3%, appears more attractive at first glance but is partly a function of a declining share price rather than improving fundamentals, a dynamic that has unsettled some long-term investors.
Capital allocation strategies underscore the contrast. Great-West has used its strong balance sheet to repurchase nearly $1 billion worth of shares by late 2025, signaling confidence in its cash generation and long-term outlook. BCE, on the other hand, has turned to asset sales, including divesting its stake in Maple Leaf Sports and Entertainment, as part of efforts to reduce debt and shore up its financial position.
Taken together, these factors have prompted analysts to view Great-West Lifeco as a safer and more sustainable dividend play heading into 2026, while BCE’s high yield increasingly comes with heightened risk. For investors prioritising stability and long-term income growth, the balance of opinion appears to be shifting decisively toward Great-West.
Top dividend stocks to watch in December 2025 as yields stay attractive
