Recently I wrote about Rolls-Royce (LSE:RR) share price at the beginning of July. Back then it was around 4.60 pounds. I concluded that its stock would remain near this level through the end of 2024.

How wrong I was. Since then, the company’s shares have risen by almost 20% and are trading at £5.55 at the time of writing (October 30).

Its shares are up 86% since the beginning of the year.

If I had invested in early 2023, the return would have been 495%.

This is definitely one of the best investments that could be made during this period.

What caused the share price to raise?

To explain the share price rally, just look at its 2024 half-year results. Rolls-Royce has been experiencing sturdy growth for some time now. For example, its pre-tax profit almost doubled to £1.04 billion in the first half of 2024 compared to the same period in 2023.

Moreover, the company is involved in fascinating projects. A Czech utility recently selected Rolls-Royce for its diminutive modular reactor (SMR) program. By 2043, this market is expected to be worth £295 billion. This shows that the company has prospects for further growth, which will assist raise its share price.

A FTSE 250 company could emulate this return

The problem with investing in Rolls-Royce at the moment is that it is becoming an increasingly risky investment. It is currently trading at a forward price-to-earnings (P/E) ratio of 28, which means its shares are quite exorbitant.

Since there is already a lot of optimism in the company, its shares may prove frail in the face of bad news. For example, further escalation of conflicts in the Middle East could adversely affect oil prices, which could harm the broader economy as well as company profits.

That’s why I would turn my head Railway line (LSE:TRN).

The FTSE250 the company saw a sturdy but relatively less impressive return of 20% in 2024.

However, its forward P/E of 22 makes its stock significantly cheaper.

But beyond that, I think there are plenty of other reasons to like this company.

It is worth noting that it grows very well. In its latest half-year results for FY25, the company saw net ticket sales raise by 14% year-on-year, reaching £3 billion. Moreover, this resulted in an raise in revenues by 17%, to £229 million.

There is also huge international potential. This is evidenced by encouraging growth in Spain and Italy, where net ticket sales increased by 23%.

However, I am concerned about the company’s dependence on carrier competition. Trainline services become redundant when competition among carriers is low. Therefore, if competition in the rail sector decreases, its operations may be at risk.

What now?

Trainline is growing well and is the most downloaded train app in Europe. I also believe that as the company continues to shift to digital train tickets over paper tickets, it could see accelerated growth in the future.

That’s why I believe it generates Rolls-Royce-like returns in the long run. That’s why I will continue to buy its shares.