Over the past few years, Rolls-Royce (LSE: RR) has been one of the great success stories of the FTSE 100 as its shares have soared.

So, just what has that meant for investors?

And am I too late to get on board by investing in the aeronautical engineer in my ISA or SIPP?

2026 has seen slowing price growth

Since the start of this year, the Rolls-Royce share price is up just 5%. That is only slightly better than the 4% gain seen so far this year across the index as a whole.

However, 2026 has seen a number of risks coming to the fore that have slowed the prior momentum of Rolls-Royce shares.

Conflict in the Middle East has hurt passenger demand in civil aviation. As we saw during the pandemic, that is a risk for airlines’ need and financial capability both for buying new engines and having existing ones serviced.

So while 2026 has been solid but not spectacular so far, it has been the longer-term picture in recent years that really explains why many investors have been so excited about the shares.

Over the past 12 months, for example, the share price has gone up by 41% in a period when the FTSE 100 has moved up by a more modest 16%.

A 41% gain in a single year is substantial. That means that someone who invested £3,000 in Rolls-Royce shares a year ago would now be sitting on a holding worth around £4,230.

Dividend growth potential

On top of that, there are dividends to consider.

The yield is a paltry 0.8%, though someone who invested at the lower share price a year back would now be earning around 1.1%.

On a £3,000 investment back then, that would amount to roughly £33 of passive income annually. The most recent Rolls-Royce dividend payment was just last week.

That is not hugely attractive compared to many other FTSE 100 yields.

But Rolls has set ambitious free cash flow growth targets. If it hits them, they could help fund dividend growth in years to come.

Strong business but I don’t like the valuation

The Middle East conflict is already a significant risk for Rolls’ civil aviation business, even though it could potentially also present opportunities for the firm’s defence and power divisions. Yet there are other risks, such as the rapid growth seen in defence start-ups and previously slow-moving defence suppliers in recent years.

That reflects an environment that could see demand grow for Rolls’ defence products. But it also represents heightened competition, which could threaten Rolls’ profit margins.

As a business, Rolls-Royce has substantial advantages, including its strong reputation for quality, large installed base of engines and large order book.

But the risks are real too and I would not like to overpay for Rolls-Royce shares. They have done brilliantly in the last few years, but during the pandemic they sold for pennies.

At 42 times earnings, I think the current share price offers me too little margin of safety for the risks involved.

So, for now at least, I have no plans to invest.

Should you invest £5,000 in Rolls-Royce Plc right now?

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Christopher Ruane does not have any position in the companies mentioned