Alaska Air Group’s stock price offers potential for capital appreciation and increased dividend payments fueled by the company’s growth plans, despite the risk of financial headwinds.

A key performance metric in the airline industry is revenue per available seat miles (RASM) and Alaska Air Group’s (NYSE:ALK) stock price could benefit from recent improvements in that key indicator. Alaska Air Group’s stock is rated a “buy” with a $95 price target, down from $110, based on a Jan. 14 “sum-of-the-parts” analysis of Stifel Nicolaus’ airline analyst Joseph DeNardi.

Stifel Nicolaus assesses airlines a bit differently than many other investment firms by using a sum-of-its-parts analysis that values its frequent flier program as a marketing business similar to a hotel chain that offers customer loyalty benefits. The investment firm gives a reduced valuation comparable to an automobile manufacturer, such as General Motors (NYSE:GM) or Ford Motor Co. (NYSE:F), when putting a price per share on the traditional passenger and cargo transportation side of the airline business.

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Paul Dykewicz, www.pauldykewicz.com, is an accomplished, award-winning journalist who has written for Dow Jones, the Wall Street Journal, Investor’s Business Daily, USA Today, the Journal of Commerce,Seeking Alpha, GuruFocus and other publications and websites. Paul is the editor of StockInvestor.com and DividendInvestor.com, a writer for both websites and a columnist. He further is the editorial director of Eagle Financial Publications in Washington, D.C., where he edits monthly investment newsletters, time-sensitive trading alerts, free e-letters and other investment reports. Paul previously served as business editor of Baltimore’s Daily Record newspaper. Paul also is the author of an inspirational book, “Holy Smokes! Golden Guidance from Notre Dame’s Championship Chaplain,” with a foreword by former national championship-winning football coach Lou Holtz.