So, hmm, it remained unclear whether there will be any kind of tax benefit for us Finns or not - will the 15% withholding tax still apply even if I choose to buy more shares directly with dividends? @Torniojaws
Shares are bought with the amount remaining after a 15% foreign tax, so there is no immediate benefit. Iâm not sure if the Finnish dividend tax portion still applies to that.
I looked into previous tax decisions, and it seems that dividends âreceivedâ via DRIP are not taxed in Finland, so there would actually be a small tax advantage. That is, the Finnish portion of 10.5% / 13.9%.
So, without DRIP:
- You receive 100 USD in dividends
- 15% stays in the US, so 85 USD comes to the account, which is roughly 75 âŹ
- From that, 10.5% (the Finnish portion) goes in taxes for the whole year, meaning a net of 67.12 âŹ
With DRIP:
- You receive 100 USD in dividends
- 15% still stays in the US, so 85 USD remains for purchase
- The same stock is bought for 85 USD, including brokerage fees
- So if the stock is, for example, 10 USD and the brokerage fee is roughly 9 USD, then 85 USD - 9 USD = 76 USD is used to buy as many shares as possible
- In this case, 7 shares (70 USD) + brokerage fee 9 USD = 79 USD
- The remaining 6 USD then comes to the account
It happened to me that in both DRIP cases, it balanced out exactly, so no extra was left over. I donât know if tax applies to those (like the 6 USD in the example above). I believe it does.
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I donât dare/want to continue further in this thread, as itâs more suited for the broker thread or similar. However, since only small dividends are coming quarterly from that company, it seems more cost-effective to take 100% as cash. Reason: OPâs brokerage fees (8e or so) would mean about 1/3 or 33% of the purchase would be costs. Therefore, Iâll accumulate dividends in the securities account into a larger lump sum and then make one transaction with a grand.
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As far as I understand, in some DRIP programs, the company actually issues new shares, which dilutes the ownership stake of existing shareholders if they do not participate in the program.
In ARCCâs case, at least the number of shares has historically grown substantially (on average 13.5% every year for the last 15 years), but I donât know if their DRIP program plays a part in this or if new shares are issued through other means.
Edit: It turns out that in DRIP, shares are bought from the market, so in principle there is no dilution, and the model where new shares are distributed is a âscrip dividendâ.
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ARCC and similar valuable BDC companies can be financed by issuing shares. Dividends have always been good, and the stock is rarely at a discount, even though dilution is continuous. The money obtained from selling shares is invested well, and decent dividends are paid moderately from investment returns; the dividend is structured so that it doesnât need to be cut. The company is easy to forget in the portfolio.
Of course, this is familiar to most, but Iâm writing more to strengthen conviction. Many companies manage that dilution so that the stockâs value never rises; one must notice the difference with a well-managed one.
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Specifically, the âissuanceâ of shares is beneficial for owners in those companies that manage to do so when the share value is above NAV, which is a normal way to increase capital in the company. If a company does that below NAV, sell off.
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Nice change and an additional dividend. Still possible to buy on Nordnet (not a buy recommendation, I own a lot)
https://seekingalpha.com/news/4457427-capital-southwest-changes-dividend-payout-frequency-to-monthly-from-quarterly
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Listed yesterday, a very interesting (sponsored by OWL, which I own a significant amount of) and immediately a large company OTF is available for purchase on Nordnet. I already made purchases when it dropped from yesterdayâs high pricesâŠ
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Has anyone tried to switch to a professional investor on Nordnet to be able to buy a wider range of products?
Another option is to open an account, for example, with Degiro and buy there. The trading cost is also only 2âŹ/trade.
There has been a lot of news coverage, lobbying, etc., on this topic in recent weeks. Now it seems that some agreement has been reached and the revenge tax would be canceled, but we will continue to monitor the situation.
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Trumpâs Bill passed and is ready for signature. And section 899 has been omitted from it, meaning the revenge tax has been âcanceledâ.
Based on this, there might be some kind of ârevenge of revengeâ behind it, which the removal of 899 cancels. So, reading between the lines, there must have been fierce lobbying wars with American international big companies and the administration? Pure speculation.
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Initially, it was feared that Trumpâs bill would raise taxes, but it ultimately included a tax reduction for BDCs:
https://www.proskauertaxtalks.com/2025/06/proposed-changes-to-interest-rate-tax-treatment-for-rics/
The OBBBA, as passed by the House, provides for a 23% deduction under Section 199A of the Code for individuals and other noncorporate taxpayers (e.g., trusts and estates) that receive qualified BDC interest dividends (the âProposed Deductionâ).
In particular, the Proposed Deduction would effectively reduce the 37% highest marginal rate (40.8% taking into account the net investment income tax) to 28.49% (32.29% taking into account the net investment income tax), a reduction of 8.51%. The 8.51% reduction corresponds to an increase of 14.375% in the after-tax yield, potentially enhancing the attractiveness of BDC investments for taxable investors compared to other loan fund structures, including both private funds and registered closed-end funds, such as interval funds.
How it will manifest in practice remains to be seen. It could be a dividend increase, a tax refund, or the cancellation of a potential dividend cut.
If I understood correctly, that Section 199A has already been in effect, e.g., for certain farmers, REITs, and some others, but it was now expanded to also include BDCs.
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It appears to be a tax deduction in the United States for BDC dividend recipients who are taxpayers. It doesnât seem to directly affect the companies themselves or the taxes of foreign investors.
Perhaps it could be seen through this that BDCs are more attractive purchases for local investors, and the share price rises.
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Maybe, but these are mainly bought for the dividend and not so much for capital appreciation, which is, of course, a nice extra bonus if one intends to sell and/or switch to another (which is quite difficult now because of Nordnet and restrictionsâŠ)
One âhybridâ is MAIN, which has yielded a reasonable dividend (compared to other BDC dividends) and capital appreciation. Now almost record expensive relative to its NAV. Blocked in Nordnet.
Capital appreciation can be achieved by being patient and timing purchases during crises, crashes, Trumpâs lips and/or fingers moving, etc.
In my portfolio, almost all BDCs are in the green, MAIN in the lead, HTGC and ARCC as strong runners-up.
Basically, for me, BDCs are a forever hold unless something significant happens at the company level.
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No âhuhâ. The forecasts were for a soft quarter, so the idea was to buy on sale tomorrow 
But didnât Hercules just make another record quarter and half-year 
Record Q2 2025 Total Gross Fundings of $709.1 Million
Record 1H 2025 Total Gross Debt and Equity Commitments of $2.02 Billion
Record 1H 2025 Total Gross Fundings of $1.25 Billion
Record Q2 2025 Net Investment Income âNIIâ of $88.7 Million
Base dividend (40 c / quarter) covered by 125%
Q2 2025 NII of $0.50 per Share provides 125% Coverage of the Base Cash Distribution
undistributed earnings still almost two quartersâ worth of dividends, so I guess weâll get a small extra dividend again
Undistributed Earnings Spillover of $134.1 Million, or $0.74 per Ending Shares Outstanding
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This Hercules is a bit of a peculiar case in my eyes in the sense that, for example, not a single analyst from the iReit / Hoya service on SeekingAlpha has ever analyzed or recommended this company. Instead, Ares Capital, OBDC, CSWC, etc. are repeatedly discussed. I own all three.
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It is steadily on its way to becoming a âhalf-bloodâ dividend aristocrat. Since 2010 (the page below only shows from 2012 onwards), it has paid a growing basic dividend uninterruptedly. The only problem regarding its aristocracy is that in some years the dividend did not grow, but remained the same.
https://www.dividendmax.com/united-states/nyse/financial-services/hercules-capital-inc/dividends
From Yahoo, pre-2012 data. The financial crisis interrupted the growth that began in 2006 until December 2009:
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Well, I donât know if you replied directly to me or generally, or if it was a continuation of your previous message, but I didnât ask about or comment on the dividend myself. Rather, why isnât this particular company very prominent in SAâs analyses? It doesnât seem to be elevated to a blue chip BDC.
Was it internal or external management there?
Looking at the development of owners on Nordnet over the last 3 years, thereâs a remarkably declining curve over the last year â can anyone speculate why? Or are these the kind of stocks that arenât buy and hold, but people lighten their positions when valuation gets high and then buy back lowerâŠ