Amazon vs. Netflix – Which Online Growth Stock is Better?

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fighting battle boxing Though summer blockbuster movies make big money,  more and more people are turning to the comfort of their own home to get their cinematic fix. Why go out and spend a small fortune on tickets and snacks, not to mention have to battle throngs of fellow moviegoers, when you can watch something for cheaper and without the hassle on your own television or computer screen?

That's the mindset that has turned online video services, like those offered by Netflix Inc. (NASDAQ: NFLX ), into multi billion-dollar companies. It's also why other companies, like Amazon (NASDAQ: AMZN ) have decided to expand their services to include movies, or other media services, that will cash in on the trend of increasing numbers of people looking for home entertainment options.

So which online entertainment option is better for investors?

 Netflix vs. Amazon

In one corner we have Netflix Inc. (NASDAQ: NFLX ). The company was founded back in 1997 but really didn't gain steam until recent years. As personal computers have really become a staple instead of a luxury in most homes, and online and video technologies continue to improve, Netflix's popularity has exploded.

As with most other things, people enjoy being able to control what they watch and when they watch it. For a low monthly fee, Netflix offers thousands of movies and television shows for subscribers to watch. The company began as a DVD service, with customers designing a list of desired DVDs and the company mailing each selection to the home. However, now Netflix is gaining much more attention for its Watch Instantly service. Subscribers can logon to the website and have access to a large library of titles that they can stream instantly on their computer. And the company is diligent about adding new titles to keep the selection fresh.

With 50% earnings growth, 50% revenue growth and nearly 160% gains over the past 12 months, it's clear that the stock is a favorite among investors. Just take a look at its fundamental breakdown and it will become clear why this A-rated stock is one to own.

In the other corner, going up against NFLX, we have Amazon (NASDAQ: AMZN ). Now you may be wondering about this matchup, after all Amazon is still known primarily for its online bookstore. What do they have to do with online movies?

The answer is "a lot." Amazon has come a long way from simply selling discounted books online. Thanks to their numerous partnerships, you can pretty much buy any retail item you can think of from the site. And the company seems to constantly be adding new services.

One of its latest is a movie-subscription service for Amazon Prime members. The site now offers unlimited movie streaming of thousands of movie and television titles at no extra cost to Prime members. Amazon's online library hasn't reached the size of Netflix yet, but they are definitely working hard to change that. For non-Prime members, the site also offers customers the options to rent or buy movies to watch instantly. And for customers buying physical copies of movies from the site, Amazon has began offering digital downloads of many films so that people to not have to wait to receive their purchase in the mail to watch it.

Both NFLX and AMZN are good buys. But this fight also has a clear winner in NFLX, especially if you're looking for a company that really specializes in online video services.



The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of The NASDAQ OMX Group, Inc.



This article appears in: Investing , Stocks

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Louis Navellier

Louis Navellier

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