For years, Canadian telecom stocks were seen as some of the best long-term dividend stocks you could buy, with BCE (TSX:BCE) being the leader in the space.

However, recently, the industry has become even more competitive, and capital expenditures have been significantly increased for years now as these companies build out both their fibre and 5G infrastructures simultaneously.

These investments were necessary for the long-term growth and sustainability of these companies, and the infrastructure that's been constructed predominantly consists of long-life assets that should help BCE and its peers generate significant cash flow for years to come.

However, in the near term, the increased spending has led to higher debt for BCE, and a growing payout ratio that investors and analysts are concerned about is becoming unsustainable.

In fact, after making yet another $5 billion investment on an acquisition, just weeks after selling its stake in Maple Leaf Sports and Entertainment for roughly $4.7 billion, BCE announced that it would only maintain its dividend in 2025 rather than continue with its annual increases to the dividend.

So, with BCE trading 32% off its 52-week high and now offering a dividend yield of more than 10%, let's look at whether it's one of the best Canadian dividend stocks you can buy now.

Is BCE one of the best Canadian dividend stocks to buy now?

Telecom stocks like BCE have traditionally been some of the best long-term Canadian dividend stocks you can buy due to the essential services they provide and the reliable cash flow they generate. However, BCE's rising payout ratio introduces a layer of uncertainty, which explains the significant discount on its shares.

Currently, BCE pays an annual dividend of $3.99 per share, requiring approximately $3.5 billion in cash flow to sustain it. However, analyst forecasts suggest the company will generate normalized earnings per share of $2.98 in 2024—down slightly from 2023. Additionally, BCE is expected to generate free cash flow just shy of $3 billion this year, which is also a modest decline from last year.

This shortfall between cash flow and dividend requirements understandably raises concerns for a company that's traditionally been one of the best Canadian dividend stocks you can buy.

However, BCE's position as a market leader in a defensive industry provides a degree of reassurance. Moreover, its recent acquisition is expected to extend its growth runway, potentially strengthening both its debt profile and its ability to maintain the dividend over the long term.

It's also important to note that BCE has an investment-grade credit rating, and maintaining this status is a key priority for management. Therefore, BCE will likely focus heavily on debt management, deleveraging, and safeguarding its dividend, which is why it might just be one of the best Canadian dividend stocks to buy now.

Is this risk worth the reward?

Despite the increased risks, BCE's 32% discount and its status as a market leader in a defensive sector present a compelling opportunity for investors today.

Furthermore, its more than 10% dividend yield is especially attractive, even if dividend growth remains muted for the foreseeable future.

Therefore, investors willing to tolerate some short-term uncertainty could see significant long-term upside, not just from the significant dividends but also from potential capital gains as BCE deleverages and its valuation recovers. Plus, with the stock trading at such a significant discount, it's hard to ignore.

For example, BCE is trading at a forward price-to-earnings (P/E) ratio of 12.8 times, well below its 10-year average of 17.2 times and essentially the lowest it's ever been over the last decade.

Furthermore, its forward enterprise value (EV) to earnings before interest, taxes, depreciation, and amortization (EBITDA) ratio is currently just 7.1 times. That's also significantly lower than its 10-year average EV/EBITDA ratio of 8.4 times.

Therefore, given BCE's status as a dominant player in a highly essential industry, its long-term growth potential, and the substantial discount on its shares today, the risk-reward profile remains compelling.

So, while the risks tied to its elevated debt and payout ratio shouldn't be overlooked, the strong likelihood that BCE will successfully navigate these short-term challenges suggests it could still be one of the best Canadian dividend stocks to buy now.