It has been a rough few weeks for investors in DroneShield Ltd (ASX: DRO) shares.

The ASX defence stock has fallen around 16% over the past week and 29% over the past month. It is now down approximately 26% in 2026, leaving its once-spectacular 12-month gain almost completely erased at just 4%.

That’s a painful reversal for investors who piled into the ASX stock during this year’s defence rally.

But there’s another way to look at it. With much of the hype now gone, the recent pullback arguably makes the risk-reward equation more attractive for long-term investors. While DroneShield remains a higher-risk stock, its position in one of defence’s fastest-growing niches continues to make it an intriguing opportunity.

Here are three reasons investors may want to take a closer look at DroneShield shares this July.

1. Specialist in one of defence’s fastest-growing markets

DroneShield isn’t trying to compete across the entire defence industry.

Instead, it has focused almost exclusively on counter-drone technology. This is a market that has moved from niche to strategic priority in just a few years.

Demand for counter-drone systems has surged as conflicts in Ukraine and the Middle East demonstrated how inexpensive drones can threaten military forces, critical infrastructure, airports, and public events.

Industry researchers estimate the global counter-UAS market could exceed US$15 billion annually by the early 2030s, driven by rising defence budgets and increasing adoption by military and civilian customers alike.

Those are powerful structural tailwinds for DroneShield shares that aren’t likely to disappear anytime soon.

2. DroneShield has built a genuine competitive niche

DroneShield is hardly the biggest name in defence. It competes with giants such as RTX Corp (NYSE: RTX), Lockheed Martin Corp (NYSE: LMT), and Thales SA (XPAR: HO), all of which have vastly greater financial resources and decades-long government relationships.

Yet DroneShield has successfully carved out a reputation as an agile counter-drone specialist. Rather than offering a single product, the company provides an integrated suite of technologies, including drone detection, electronic warfare systems, AI-enabled tracking software, and command-and-control platforms.

That breadth has helped it secure an increasing number of contracts with defence agencies and government customers.

Recent wins for DroneShield shares include multi-million-dollar contracts across Europe, Latin America, and Asia-Pacific, as well as ongoing supply agreements with military customers responding to heightened geopolitical tensions.

For a business of DroneShield’s size, those contract wins demonstrate growing credibility on the global stage.

3. The valuation looks more reasonable

Earlier this year, DroneShield shares were pricing in almost flawless execution. After the recent sell-off, expectations have become considerably more realistic.

That’s not to say the shares are cheap – they still carry meaningful execution risk – but investors are no longer paying peak multiples for the business.

If the company continues converting growing defence demand into larger, more frequent contract wins, today’s valuation could prove much more attractive than it appeared just a month ago.

Foolish takeaway

Investing in DroneShield shares is not without risks. Revenue remains lumpy because defence contracts are often awarded irregularly. Procurement decisions can be delayed, larger competitors may invest more heavily in counter-drone technologies, and rapid innovation means the company must continually invest in research and development.

But the long-term investment case remains compelling. Counter-drone technology is becoming an increasingly important part of modern defence. DroneShield has established itself as a recognised specialist in the field, and the recent share price correction has significantly lowered investor expectations.

For investors comfortable with volatility, July could present an opportunity to buy a quality defence growth stock after a sharp reset.

The post 3 reasons to buy DroneShield shares in July appeared first on The Motley Fool Australia.

More reading

• Here are the 10 most shorted ASX shares
• After a horror week: Are DroneShield shares a buy, hold or sell?
• Why DroneShield, WiseTech and Judo shares are leading the ASX 200 lower this week
• Is DroneShield the ASX growth share investors should be buying?
• Should I invest $5,000 in DroneShield shares before the end of June?

Motley Fool contributor Marc Van Dinther 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 DroneShield and RTX. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has recommended Lockheed Martin. 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.

There could be big returns waiting for investors in the healthcare sector according to analysts at Bell Potter.

In fact, the ASX healthcare share in this article is being tipped to almost double in value from current levels.

Which ASX healthcare share?

The share in question is Neuren Pharmaceuticals Ltd (ASX: NEU).

It is a biotechnology company with two novel drug assets. Bell Potter notes that the most advanced is Daybue (trofinetide), which was out-licensed to Acadia (NASDAQ: ACAD).

The ASX healthcare share’s second asset, NNZ-2591, is under development for multiple rare diseases. The most advanced is Phelan McDermid syndrome.

Neuren Pharmaceuticals is currently conducting a Phase three trial in Phelan McDermid syndrome and has conducted Phase 2 trials in three other rare neurological conditions.

Bell Potter believes the market is ascribing no value to NNZ-2591, which it feels has created a compelling buying opportunity for investors.

At the same time, it highlights that European regulators have reversed a negative recommendation on Daybue in the region, putting it on a likely path to approval.

Commenting on this, Bell Potter said:

The addition of Daybue European sales adds ~$2/share to our NPV valuation based on current forecasts. We estimate the future value of Daybue licensing income to be ~$9.50 (comprising ~$7.50 from the US and ~$2 from Europe). The existing ~A$300m cash balance equates to ~$2.50/share. Hence a total value of ~$12/share for cash + Daybue licensing income, excluding any contribution from NNZ-2591.

At the latest closing price, we therefore see effectively zero implied value for NEU’s second asset, which in itself would be a multi-billion-dollar value asset should it succeed in the Phase 3 trial. The Phase 3 remains in the early stages of recruitment, with results not expected until the end of CY27 at the very earliest (pending recruitment pace).

Big potential returns

According to the note, Bell Potter has retained its buy rating on the ASX healthcare share with an improved price target of $23.50 (from $22.00).

Based on its current share price of $12.20, this implies potential upside of approximately 93% for investors over the next 12 months. It said:

We maintain our BUY recommendation and increase PT to $23.50.

To put that into context, a $5,000 investment would turn into approximately $9,650 by this time next year if Bell Potter is on the money with its recommendation.

The post Bell Potter says this ASX healthcare share could rise 93% (It’s not CSL) appeared first on The Motley Fool Australia.

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Motley Fool contributor James Mickleboro has positions in CSL. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has positions in and has recommended CSL. The Motley Fool Australia has recommended CSL. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

ASX blue-chip shares can be among the best options for passive income because of both their dividend yields and the stability they provide.

Businesses that are market leaders in their sector can be a very effective choice because they are much stronger than competitors, with scale and margin advantages.

The two businesses below have a strong track record of paying dividends, and I expect compelling dividend payouts in the months and years ahead.

JB Hi-Fi Ltd (ASX: JBH)

JB Hi-Fi is one of the leading retailers in Australia and New Zealand, with its JB Hi-Fi Australia, JB Hi-Fi New Zealand, The Good Guys and E&S Trading businesses.

The ASX blue-chip share is arguably the market leader in electronics and appliances in Australia, and it continues to work on improving its position through new stores, increased scale, and a low-cost operating model.

JB Hi-Fi has grown its annual dividend in most years over the last 13 years, which is impressive to me for a retailer.

The business doesn’t typically trade on a high price/earnings (P/E) ratio, which means its dividend yield can be attractive.

According to Commsec’s projection, the business is forecast to pay an annual dividend per share of $3.38 in FY26. That translates into a possible grossed-up dividend yield of 5.9%, including franking credits.

Electronics and appliances remain an essential element for many households, so I expect the company can deliver fairly defensive earnings during this period of higher inflation and interest rates (again).

Telstra Group Ltd (ASX: TLS)

Telstra is Australia’s leading telecommunications business with the most subscribers, the widest network coverage and seemingly the best spectrum assets to deliver its service.

The ASX blue-chip share has leveraged its market position in Australia with regular price increases. Unlocking more revenue from the same number of subscribers should improve its margins, since costs aren’t increasing at the same pace.

Australia is becoming increasingly digital for households, businesses and government, which gives the company defensive earnings. Plus, Australia’s growing population gives the business a tailwind to win more subscribers.

According to Commsec’s projection, the business is forecast to pay an annual dividend per share of 21 cents in FY26. That translates into a possible grossed-up dividend yield of 5.8%, including franking credits.

The business has a strong chance of increasing its dividend in FY27 and is expected to raise its annual payout to 21.5 cents per share, according to projections on Commsec.

The post 2 ASX blue-chip shares offering big dividend yields appeared first on The Motley Fool Australia.

More reading

• How to build passive income for life from the ASX share market
• Why Telstra shares could be a top ASX buy for the new financial year
• ASX 200 retail shares outperform on growing hopes interest rates have peaked
• 3 ASX shares I’d buy and hold for my kids
• Where should I invest inside SMSFs instead of property?

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 positions in and has recommended Telstra Group. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.