what is the utilities sector 
sector investing offers targeted opportunities into the stocks of companies in specific segments of the economy the utilities sector includes companies such as electric gas or water utilities or those that operate as producers or distributors of power as of july 2022 the sector had a market capitalization of over 1 58 trillion although utilities are private for profit companies they are part of the public service infrastructure and are heavily regulated those who include utilities in their portfolios hold them as long term investments and commonly use them to generate income through dividends understanding the utilities sectorutilities include large companies that offer multiple services such as electricity and natural gas or specialize in just one type of service such as water some utilities rely on clean and renewable energy sources like wind turbines and solar panels to produce electricity utilities typically offer investors stable and consistent dividends coupled with less price volatility relative to the overall equity markets as a result utilities tend to perform well during recessions and economic downturns conversely utility stocks tend to fall out of favor with the market during times of economic growth utilities require a significant amount of expensive infrastructure and consequently carry large amounts of debt on their balance sheets these debt loads make utilities hypersensitive to changes in the market interest rate and because utilities are capital intensive they require a continuous inflow of funds to finance infrastructure upgrades and new asset purchases as of july 2022 higher inflation raised new challenges for utilities during the inflation of the 1970s and 80s utilities faced large debt soaring fuel costs blackouts increased regulation and bankruptcies utilities that succeed through economic challenges will likely continue to rank among the best investments for safety generous income and steady wealth building although the sector appeals to a wide range of investors utilities companies commonly attract income producing investments 