Why is the Northern Star share price sliding on Tuesday?

Shares in the gold miner are underperforming the benchmark today.

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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.

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