Electro Optic Systems Holdings Ltd (ASX: EOS) shares have been among the strongest performers on the Australian share market over the past year.

During this time, the defence and space company’s shares have risen an incredible 293%.

Despite this incredible rise, the team at Bell Potter believes it isn’t too late to invest.

What is the broker saying about Electro Optic Systems (EOS) shares?

Bell Potter was pleased to see the company announce a major order from the UAE this month for one of its Slinger products. It said:

EOS has secured a US$124m (A$175m) Slinger counter-drone (C-UAS) order and entered a binding, conditional joint venture (JV) with Gen5, a 100% UAE-owned defence company, covering its High Energy Laser Weapon (HELW) and Remote Weapon System (RWS) franchises.

The A$175m order comprises the remote weapon system, cannon, spares, training and associated supplies. EOS understands the systems are intended to strengthen defence capability in light of ongoing regional tensions in the Middle East. Manufacturing is expected to be split between Australia and the UAE, with deliveries across 2027 and 2028; the order is subject to Gen5’s customary terms and to export approval requirements.

Another positive from the announcement was news that EOS is looking to form a joint venture with this customer. It adds:

EOS and Gen5 have entered a binding, conditional agreement to establish an incorporated JV covering the development, manufacture and distribution of EOS’s 100-150kW and 200-300kW HELW products and RWS products. The JV is expected to be based in Abu Dhabi on a 50/50 equity and profit-sharing basis, subject to relevant UAE laws and government approvals, and EOS believes it could begin contributing to results from 2027 or 2028 onwards. Under the agreement, Gen5 is obligated to contribute US$40m of equity to the JV while EOS contributes its existing IP.

Both parties will use reasonable endeavours to secure a minimum US$250m order for the 200-300kW HELW within 12 months and a minimum US$290m order for the 100-150kW HELW within nine months, and to progress a solution with UAE government agency Tawazun to grant EOS offset credit benefits. The JV will own the IP for the 200-300kW system, and its scope may be extended to include Command & Control (C2) and Space Control.

More strong returns to come

According to the note, Bell Potter has retained its buy rating on EOS shares with an improved price target of $12.50 (from $10.60).

Based on the current EOS share price of $10.26, this implies potential upside of 22% for investors over the next 12 months.

Commenting on its recommendation, Bell Potter concludes:

We retain our Buy rating and raise our TP to $12.50/sh. EOS is positioned as a market leader across many C-UAS verticals and is leveraged to increasing defence budget allocations to C-UAS technologies. The conditional JV announcement presents a clear path towards producing HELW systems at scale and is therefore a significant development. We expect further JVs to be signed over the coming years. The agreement suggests there is a strong likelihood of major HELW order intake over the next 12 months from the UAE.

The post Up 293%! Can Electro Optic Systems (EOS) shares keep rising? appeared first on The Motley Fool Australia.

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Motley Fool contributor James Mickleboro has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has positions in and has recommended Electro Optic Systems. 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.

Coles Group Ltd (ASX: COL) shares have, in my opinion, been one of the best ASX blue-chip shares, and have mostly flown under the radar. The supermarket business offers retiree investors a number of positives.

The company’s key division is supermarkets, though it also generates earnings from liquor (Liquorland), Flybuys and financial services (insurance, credit cards and personal loans).

There are three elements that make me believe the ASX share is a very useful pick for retirees in FY27.

Good dividend yield

One of the best reasons to like the business is that it offers a solid level of passive income. That’s because it has a generously high dividend payout ratio and a reasonable price/earnings (P/E) ratio, leading to a good dividend yield.

Based on the projection on Commsec, the business is forecast to pay an annual dividend per share of 82 cents in FY27.

Using that estimate, Coles could pay a grossed-up dividend yield of 5%, including franking credits, at the time of writing. That’s a high enough yield to challenge the return from term deposits.

Growing payouts

For me, the most important factor is how consistently the supermarket business has paid and grown its dividends.

Coles started paying a dividend in 2019 after its demerger. It has grown its annual dividend per share every year since 2019, so it has already given investors several years of consecutive growth and I think it has potential to continue this.

The business is predicted to grow its annual payout regularly, according to Commsec. It could raise its annual payout to 75.5 cents per share in FY26, 82 cents per share in FY27 and 95.3 cents per share in FY28.

The company can deliver such pleasing dividend growth thanks to its rising profit.

Long-term earnings growth

There are a few long-term tailwinds for its net profit over time, which includes a rising population, long-term inflation of food prices, an expanding supermarket network, and strengthening operating leverage.

Part of the strategy includes the fact that Coles has built multiple high-quality, advanced warehouses, which help improve efficiencies, stock flow, online order fulfilment, and more.

The company’s revenue is regularly growing and this is coming through in the quarterly updates. In the FY26 third-quarter, total sales grew by 3.1% to $10.7 billion and supermarket sales rose by 4% to $9.8 billion. Impressively, e-commerce sales jumped 24.8%, with online sales penetration increasing to 13.6%.

Retirees could see Coles’ earnings per share (EPS) rise by a projected 11% in FY26, 7.3% in FY27 and 16% in FY28.

This means the business is valued at 24x FY27’s estimated earnings. It’s not cheap, but I think it’s a great long-term option.

However, it’s not the only ASX share I think would work very well for retirees.

The post Why Coles shares are a retiree’s dream for FY27 appeared first on The Motley Fool Australia.

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• Buy, hold, sell: Coles, Telstra, Wesfarmers, and Woolworths shares
• Buying Coles shares? Here’s the dividend yield you’ll get today

Motley Fool contributor Tristan Harrison 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. 

Retiring early will not happen by accident.

For most people, it takes years of investing, patience, and the willingness to keep putting money to work even when the share market feels uncertain.

But I think $500 a month can become a powerful starting point.

That amount may not feel like it could be life-changing at first. But if it is invested regularly into ASX 200 shares and allowed to compound over decades, it could make a major difference to someone’s financial future.

Here is how I would approach it.

Let the habit do the work

The first step is building the habit. 

If an investor put $500 a month into ASX 200 shares and achieved an average annual return of 9%, the portfolio could grow to more than $850,000 after 30 years. After 32 years, it could pass $1 million.

Those numbers are only examples. Actual returns will vary, and there will be years when the portfolio falls.

But the point is that early retirement is not only about finding the next great stock. It is about creating a repeatable process and giving that process enough time to matter.

A $500 monthly investment also has another advantage. It takes away some of the pressure of trying to pick the perfect moment to buy. Some purchases will happen when prices are high. Others will happen when fear is higher and valuations look more attractive.

Over long periods, I think that consistency can be more useful than waiting for the perfect entry point.

Buy businesses that can grow

If I were investing $500 a month into ASX 200 shares, I would want a mix of companies with strong positions and room to get larger.

Aristocrat Leisure Ltd (ASX: ALL) is one example I would consider. 

It has built a global business around gaming content, gaming machines, digital products, and intellectual property. What I like is that the company’s success depends heavily on product quality and reinvestment. 

If it keeps creating content that venues and players value, I think it can remain a strong long-term compounder.

TechnologyOne Ltd (ASX: TNE) is another ASX 200 share I would look at. Its software is used by organisations that need reliable systems for finance, payroll, student management, local government, and other core operations. That kind of software can become deeply embedded in customer workflows, which can support recurring revenue and long-term growth.

I would also consider Sigma Healthcare Ltd (ASX: SIG). The business is now tied to a large pharmacy retail and distribution platform, with exposure to everyday health, beauty, wellness, and prescription needs. 

I like the repeat nature of the spending and the potential for scale to support supplier relationships, logistics, customer data, and broader category growth.

These are not the only ASX 200 shares I would buy. But they show the sort of qualities I would be looking for: relevance, scale, and a clear reason the business could be worth more in the future.

Stay focused on the end goal

The hardest part of this strategy may not be the maths. It may be staying patient.

A $500 monthly investment will not look meaningful in the early years. The portfolio may feel slow to move, and market falls can make the progress look even slower.

But compounding often becomes more visible later. Once the portfolio reaches a decent size, investment returns can start adding more than the monthly contributions in strong years.

That is when the early discipline begins to pay off.

Foolish takeaway

I think investing $500 a month into ASX 200 shares could be a realistic way to work toward early retirement.

It will still take time, and investors need to choose businesses carefully. But the strategy does not need to rely on one lucky stock pick.

Regular investing, quality companies, reinvested returns, and patience can be a powerful combination.

For someone starting today, I think the best move is simply to begin. The earlier the habit starts, the more time compounding has to turn those monthly investments into something much more meaningful.

The post I’d invest $500 a month in ASX 200 shares to retire early appeared first on The Motley Fool Australia.

More reading

• 3 ASX growth shares to buy next month
• These ASX gaming stocks are rebounding. Is it for real?
• How I’d invest $250 a week in ASX shares to aim for $700,000
• Healthcare shares led the ASX 200 last week. Is a sector comeback underway?
• How to build a $1 million ASX share portfolio for retirement

Motley Fool contributor Grace Alvino has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has positions in and has recommended Technology One. The Motley Fool Australia has recommended Technology One. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.