Check out the latest Netflix earnings call transcript.

Some investors go out of their way to avoid so-called sin stocks -- companies working in fields that might be considered immoral by some standards such as alcohol, tobacco, guns, and marijuana. Others love investing in sin stocks because of their ability to produce strong sales and profits in good times or bad. This conflict between questionable ethics and solid business prospects often results in sin stocks trading at deep discounts from time to time -- only to swing back to black when the profits become impossible to ignore.

Netflix (NASDAQ:NFLX) may not be the first stock that springs to mind in this discussion, but I would argue that the streaming video veteran qualifies as a sin stock in many ways.

Netflix logo with a tagline: "See what's next."

Image source: Netflix.

The lighter side

Technically speaking, Netflix certainly taps into a couple of the seven cardinal sins.

  • Binge-watching a few seasons of Orange Is the New Black or the entire run of Bloodline on a lazy weekend might count as both sloth and gluttony.
  • Demanding the next season of Stranger Things or 13 Reasons Why to show up, like, yesterday probably falls into the category of greed.
  • When those premieres turn out to be months away, or when Netflix just canceled your favorite Marvel shows, it's not always easy to hold the wrath back.
  • Netflix originals (and drama in general) rely pretty heavily on all the classical sins for adding spice and conflict to the stories they're telling.
  • And don't forget the phrase "Netflix and chill" has become a shorthand for, essentially, lust.

The business side

On a more serious note, sin stocks tend to rely on a quality that those biblical terms don't quite cover. I'm talking about addiction. People buy booze, drugs, and cigarettes even in times of recession or heavy unemployment. It's not always a conscious choice but more of a deep-seated need. Cravings not easily ignored.

Maybe I'm stretching Netflix's addictive qualities a bit too far, here, but the streaming service really does get its hooks into consumers. The grand plan is not to create the next Breaking Bad or Game of Thrones -- singular masterpieces with huge and committed audiences that become a widely recognized symbol for the entire service. Instead, Netflix wants to make lots and lots of really great (but not necessarily game-changing) shows and movies in a wide variety of genres and niches. Whatever you're into, this company wants to serve you a few pieces of high-quality content in your favorite niche that will keep you coming back for more.

It shows in the business results, too. Netflix has boosted subscription prices for domestic customers four times in the last five years, including a $2 increase in monthly fees for its most popular plans earlier this month. At the same time, rivals and production partners alike have started up or planned streaming services of their own, arguably undermining Netflix's first-mover advantage.

Did Netflix subscribers flee the service by the boatload, driven away by surging service fees? Hardly.

Instead, domestic subscriber count nearly doubled from 33.4 million to 60.6 million over this five-year period. Annual revenue from the U.S. division nearly tripled from $2.8 billion to $7.6 billion as the price increases amplified the impact that Netflix's subscriber growth made on its income statements. Further down the report, domestic operating profit more than quadrupled from $623 million to $2.6 billion.

In other words, people are choosing Netflix instead of or alongside a growing collection of competitors, and they're willing to pay more for it. Sounds like an addiction to me, defining Netflix as a wealth-building sin stock in all the right ways.