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.

More reading

• How to invest in ASX shares when you can’t find stocks to buy
• Woolworths shares vs Coles: Buy, hold, or sell these ASX giants?
• Which is better: A 4% dividend yield or a 5% term deposit?
• 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.

The Betashares Nasdaq 100 ETF (ASX: NDQ) and the Vanguard Australian Shares Index ETF (ASX: VAS) are two very popular but very different ASX exchange traded funds (ETFs).

Both can be useful long-term investments, but they give investors exposure to very different parts of the share market.

One is focused on the Nasdaq 100 and many of the world’s most important technology and growth companies. The other gives broad exposure to the Australian share market, including banks, miners, healthcare companies, retailers, and industrial shares.

So, which one makes more sense for investors today?

What does the NDQ ETF offer?

The Betashares Nasdaq 100 ETF gives investors exposure to 100 of the largest non-financial companies listed on the Nasdaq.

This means the fund is heavily exposed to global technology and innovation.

Its holdings typically include businesses involved in cloud computing, cybersecurity, artificial intelligence, semiconductors, software, digital advertising, ecommerce, streaming, and consumer technology, such as NVIDIA (NASDAQ: NVDA), Microsoft (NASDAQ: MSFT), and Apple (NASDAQ: AAPL).

This gives the NDQ ETF a strong long-term tailwind.

The trade-off is volatility. Growth and technology shares can fall sharply when interest rates rise, valuations are questioned, or investors become more cautious. But for investors with a decade-long time horizon, that volatility may be worth accepting.

What does the VAS ETF offer?

The Vanguard Australian Shares Index ETF is very different.

This ASX ETF gives investors exposure to the Australian share market through a broad basket of local shares.

That includes all the major banks, large miners, healthcare companies, supermarkets, infrastructure businesses, insurers, property groups, and other leading ASX companies, such as BHP Group Ltd (ASX: BHP), Commonwealth Bank of Australia (ASX: CBA), and Woolworths Group Ltd (ASX: WOW).

The Australian market has historically been attractive for income investors because many large companies pay dividends and, in some cases, offer franking credits.

This is where it has an advantage over the NDQ ETF. Investors seeking growth with some income on the side may find the VAS ETF appealing.

Verdict

Both ASX ETFs look like buys for long-term investors.

The VAS ETF could be the better choice for investors who want Australian exposure, more dividend income, and a simpler way to own a broad slice of the local share market.

However, the NDQ ETF is my pick for investors chasing stronger capital growth over the next decade.

Its focus on global technology leaders gives it exposure to some of the most powerful trends in the world economy. While investors should expect ups and downs along the way, it could be the better option for those willing to accept more volatility in pursuit of higher long-term returns.

The post Should I buy the NDQ ETF or the VAS ETF? appeared first on The Motley Fool Australia.

More reading

• The ASX investing strategy that could quietly make you rich
• 4 ASX ETFs to help you sleep through market crashes
• 10 amazing ASX ETFs for the next decade
• 3 easy ways to buy Nvidia stock on the ASX
• New to ASX ETFs? These 4 products could be a good start

Motley Fool contributor James Mickleboro has positions in BetaShares Nasdaq 100 ETF and Woolworths Group. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has positions in and has recommended Apple, BetaShares Nasdaq 100 ETF, Microsoft, and Nvidia. The Motley Fool Australia has positions in and has recommended BetaShares Nasdaq 100 ETF. The Motley Fool Australia has recommended Apple, BHP Group, Microsoft, and Nvidia. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.