Canadians are searching for reliable dividend stocks to help them meet their retirement goals.

Let’s take a look at Bank of Nova Scotia (TSX:BNS)(NYSE:BNS) and Fortis Inc. (TSX:FTS) to see if one is a better RRSP choice.

Bank of Nova Scotia

Investors who prefer to buy its larger peers often overlook Canada’s third-largest bank, but that move could be a mistake.

Bank of Nova Scotia is betting big on international growth with a specific focus on Latin America. Given the fact that the average Canadian is already carrying record levels of debt, the move into a low-penetration market makes sense.

Bank of Nova Scotia is primarily targeting Mexico, Colombia, Peru, and Chile. These countries form the core of the Pacific Alliance–a trade bloc set up to enable the free movement of goods and capital.

By building a strategic position in each of the four countries, Bank of Nova Scotia is positioned well to benefit from increased trade in the bloc.

The company also has its sights on the roughly 200 million people who live in the trade zone. As the middle class expands, demand for retail banking products and service will increase.

The international division is already delivering solid results. Net income for fiscal Q2 2016 jumped 12% in the group as compared to last year with Latin America leading the way. Loans and deposits both rose at a healthy clip.

Bank of Nova Scotia has a strong track record of dividend growth. The current distribution yields 4.4%.


Fortis owns companies that generate electricity and distribute natural gas. Those activities might not sound very exciting, but the business has proven to be very rewarding for investors.

The company grows through a mix of organic development and acquisitions. Much of the recent investment has focused on the United States.

In 2014 Fortis spent US$4.5 billion to buy Arizona-based UNS Energy. The integration of the natural gas distributor went well, and the additional revenue stream helped support a 10% dividend increase last year.

Management is now in the process of acquiring ITC Holdings Corp., a major U.S. transmission company, for a whopping US$11.3 billion.

Investors initially had some concerns about the size of the deal, but a plan to sell 20% to a foreign partner has helped make the move more palatable.

Fortis is popular with the dividend crowd because the majority of its revenue is generated by regulated businesses. This means cash flow should be both predictable and reliable.

Fortis is one of Canada’s top dividend-growth stocks. The company has raised the payout every year for more than four decades, and annual distribution growth should continue at a healthy 6% per year or better.

The stock currently yields 3.5%.

Which is a better RRSP bet?

The two stocks have enjoyed strong rallies since the start of the year, so neither is overly cheap right now, but both companies are solid long-term RRSP holdings and should deliver decent results for patient investors.

Bank of Nova Scotia offers a better yield. Fortis has delivered stronger returns over the past decade.

If you have an appetite for a bit more risk and like the growth opportunity in Latin America, go with Bank of Nova Scotia. Otherwise, make Fortis your first pick.

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Fool contributor Andrew Walker has no position in any stocks mentioned.