The Globe and Mail reports in its Saturday edition that BCE is paying out more in dividends than it generates in free cash flow (FCF), and this cannot continue forever. The Globe's John Heinzl writes that the big question is whether the company can gradually bring its payout ratio down to a more sustainable level by increasing earnings and cash flow, cutting capital spending and perhaps throttling back its dividend growth -- or whether it will have to resort to a dividend cut to get there. Mr. Heinzl argues that while it is possible that BCE could eventually cut its dividend if its financials do not improve, he does not believe such a decision is imminent. This is a large company with lots of financial levers it can pull, he says. What is more, based on its stable credit ratings, BCE does not appear to be in any danger of losing its investment-grade status, which is often the impetus for a company to slash its 8-per-cent payout. "We believe BCE's dividend is safe," Desjardins analyst Jerome Dubreuil said in a note after BCE's fourth-quarter results in February. However, he adds, "The high payout of FCF limits future distribution increases and makes it more difficult for the company to invest in certain projects."