WestJet Airlines Ltd. (TSX:WJA), one of the largest airlines in North America, has watched its stock fall over 18% in 2015 despite reporting record fourth-quarter earnings results on February 3 and record first-quarter earnings results on May 5, and it now sits more than 22% below its 52-week high. I think the stock has bottomed and has the potential to be one of the market’s top performing stocks from this point forward, so let’s take a look at three of the primary reasons why you should consider initiating a position today.

1. Record first-quarter earnings results to support a rally

WestJet released record first-quarter earnings results before the market opened on May 5, but its stock has responded by falling over 3.5% in the trading sessions since. Here’s a breakdown of 10 of the most notable statistics from the report compared with the year-ago period:

  1. Net income increased 57.6% to $140.7 million
  2. Earnings per share increased 58% to $1.09
  3. Revenue increased 4% to $1.08 billion
  4. Total guests increased 2.2% to 4.91 million
  5. Revenue from guests increased 2.1% to $956.95 million
  6. Operating profit increased 49.8% to $197.16 million
  7. Operating margin expanded 560 basis points to 18.2%
  8. Earnings before income tax increased 56.7% to $192.45 million
  9. Net cash provided by operating activities increased 311.9% to $256.58 million
  10. Return on invested capital improved 150 basis points to an all-time high of 15.8%

The results above also surpassed analysts’ expectations, which called for earnings per share of $0.99 and revenue of $1.07 billion, and represented the 40th consecutive profitable quarter for WestJet.

2. The stock trades at inexpensive forward valuations

At today’s levels WestJet’s stock trades at just 8.2 times fiscal 2015’s estimated earnings per share of $3.32 and only 7.8 times fiscal 2016’s estimated earnings per share of $3.48, both of which are inexpensive compared with its five-year average price-to-earnings multiple of 13.8 and the industry average price-to-earnings multiple of 12.8.

I think WestJet’s stock could consistently command a fair multiple of at least 12, which would place its shares upwards of $39.75 by the conclusion of fiscal 2015 and upwards of $41.75 by the conclusion of fiscal 2016, representing upside of more than 46% and 53%, respectively, from current levels.

3. A dividend that is on the rise 

WestJet pays quarterly dividend of $0.14 per share, or $0.56 per share annually, which gives its stock a 2.1% yield at today’s levels. A 2.1% yield is not high by any means, but it is very important for investors to note that the company has increased its dividend five times in the last three years, and its increased amount of free cash flow could allow for another increase in the very near future.

Is WestJet the top airline stock to buy today?

I think WestJet Airlines represents one of the best long-term investment opportunities in the market today. It has the support of record first-quarter earnings results, its stock trades at inexpensive forward valuations, and it has a growing dividend with a current yield of approximately 2.1%. All long-term investors should take a closer look and strongly consider beginning to scale in to positions in WestJet today.

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Fool contributor Joseph Solitro has no position in any stocks mentioned.