Why is the Northern Star share price sliding on Tuesday?

Shares in the gold miner are underperforming the benchmark today.

| More on:
a man sits in unhappy contemplation staring at his computer on his desk in a home environment, propping his chin on his hand.

Image source: Getty Images

You’re reading a free article with opinions that may differ from The Motley Fool’s Premium Investing Services. Become a Motley Fool member today to get instant access to our top analyst recommendations, in-depth research, investing resources, and more. Learn More

The Northern Star Resources Ltd (ASX: NST) share price is in the red on Tuesday.

Shares in the S&P/ASX 200 Index (ASX: XJO) gold miner closed yesterday trading for $11.68. At the time of writing, Northern Star shares are swapping hands for $11.37 apiece, down 2.7%.

For some context, the ASX 200 is down 0.5%  at this same time.

Here's what ASX 200 investors are considering.

Why is the ASX 200 gold stock under selling pressure today?

To be fair, it's not just the Northern Star share price that's underperforming the ASX 200 this morning. Most of the miner's peers are also well into the red.

At the time of writing, the S&P/ASX All Ordinaries Gold Index (ASX: XGD) is down 1.6%.

Part of that pressure looks to be a modest retrace in the gold price. The yellow metal is currently fetching US$1,937.55 per ounce, down 0.3% overnight.

The Northern Star share price is also facing some additional headwinds because the stock is trading ex-dividend today.

That means investors buying shares today will no longer receive the unfranked 15.5 cents per share final dividend. On the other hand, shareholders selling Northern Star shares today will still receive that passive income on October 12.

It's very common for stocks to fall on the day they trade without their dividend rights.

And if we add back in the 15.5 cents per share dividend, the Northern Star share price is only down 1.4%, broadly in line with the rest of the ASX gold sector today.

Management declared the final dividend, up 34% from the one paid in FY22, when the miner reported its FY23 results on 24 August.

Among the highlights that helped drive the big boost in the Northern Star dividend was a 9% year-on-year increase in revenue, which reached $4.13 billion. The ASX 200 gold miner also achieved record cash earnings of $1.22 billion.

Commenting on the Northern Star dividend payout on the day, managing director Stuart Tonkin said:

The strength of our FY23 cash earnings has allowed the board to declare an unfranked final dividend of 15.5 cents per share, which is the mid-point of our dividend policy.

Combined with the on-market share buy-back that was launched during the year, we have increased our capital management returns to shareholders since Northern Star's creation in FY12 to $1.4 billion – confirming our position as a leading ASX-listed mining company committed to sustainable returns to shareholders.

Northern Star share price snapshot

The ASX 200 gold miner has been an exceptionally strong performer over the past 12 months.

Since this time last year, the Northern Star share price has soared 54%. And that's not including the dividends.

Motley Fool contributor Bernd Struben has no position in any of the stocks mentioned. The Motley Fool Australia's parent company Motley Fool Holdings Inc. has no position in any of the stocks mentioned. The Motley Fool Australia has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

More on Gold

A woman wearing a gold top and carrying a gold bar gives the thumbs down signal as she leans against a wall with a sombre look on her face as the Kingsgate share price goes lower
Earnings Results

Guess which ASX 200 gold stock is crashing on US$2.5b loss

This gold miner's results haven't gone down well with the market.

Read more »

plummeting gold share price
Share Fallers

How has this ASX 300 gold share managed to crash 50% today?

Investors have just lost half of their money with this stock.

Read more »

A woman holds a gold bar in one hand and puts her other hand to her forehead with an apprehensive and concerned expression on her face after watching the Ramelius share price fall today

Guess which ASX 200 gold stock is crashing 15% on a disappointing update

Investors aren't happy with the gold miner's update.

Read more »

Calculator and gold bars on Australian dollars, symbolising dividends.

Guess which ASX gold shares are sinking after announcing a ~$2.3b merger

Management believes this potential merger will be 'an exciting inflection point' for shareholders. Shareholders don't appear to agree.

Read more »

A man clenches his fists in excitement as gold coins fall from the sky.

Guess which ASX 200 gold share Bell Potter says is a buy with almost 30% upside

Golden returns could be on the cards for owners of this mining share.

Read more »

rising gold share price represented by a green arrow on piles of gold block

Gold Road shares rebound 7% as brokers scramble to upgrade ASX 200 gold stock

ASX 200 gold stock Gold Road Resources is enjoying a massive rebound today.

Read more »

Gold bars with a share price chart in the background.

After soaring 15% in 2023, what's ahead for the gold price in 2024?

ASX 200 gold stocks received some heady tailwinds in 2023 from a surging gold price.

Read more »

plummeting gold share price

Why is this leading ASX 200 gold stock crashing 14% today?

The ASX 200 gold miner is coming under heavy selling pressure today.

Read more »