Why Netflix Is a Top Stock to Buy Now

When consumers buy a house, they take on debt that will take decades to pay off, but gain the stability of knowing where they will live long-term. Mortgage lenders look at their ability to generate income, their history of paying their debts in a timely fashion, and the likelihood that they will continue to do so. While this is by no means an apples-to-apples comparison, it provides a useful example of how streaming pioneer Netflix, Inc. (NASDAQ: NFLX) is building not a house but a library, and how it will continue to generate additional subscribers for years to come. It's also the reason that I think Netflix is a top stock to buy now.

Consider the original model that Netflix used to build its business. It would buy stacks and stacks of movies on disk and ship them via little red mailers to consumers everywhere. The theory was that once the company owned those disks, they would be watched by legions of subscribers until they were paid for, then subsequently generate a profit as they became part of the company's massive library.

Netflix originals are leading to a surge in subscriber growth. Image source: Netflix.

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Source: Fool.com