The market has now given back nearly all the gains from the summer rally that began in mid-June, with stocks threatening a trip back down to the lows of the year. Just when the major indices appeared to have picked up some momentum, the rally stalled and it’s been nearly a straight shot down over the past month.

“The air goes out of the balloon much faster than it went in.” – Sheldon Stone

As we head into the dreaded and historically weak second half of September, there aren’t many pockets of the market that look appealing right now. Even energy names are beginning to show signs of weakness after leading throughout most of the year.

But one sector that has held up extraordinarily well is utilities. This defensive space tends to outperform during major corrections and bear markets, and it has certainly been the case this year. The Zacks Utilities sector is up nearly 2% on the year, which doesn’t sound like much. But when you take into account the fact that the S&P 500 has fallen more than 19% year-to-date, the relative outperformance seems more drastic.

The Utilities Sector SPDR ETF (XLU Quick QuoteXLU - Free Report) is showing resilience recently and is up more than 6% this year. XLU has outperformed over the past month and is showing no signs of a peak in the movement. Apart from energy, the utilities sector is leading the pack this year and recently broke out to new all-time highs earlier this month. New highs are a sign of strength; many utility companies within the XLU ETF have completed large bases and are climbing into new ground on above-average volume, which serves as another sign that XLU move may have more room to run.

The Zacks Utility – Electric Power industry is currently ranked in the top 33% out of more than 250 industry groups. This group has widely outperformed the market this year as we can see below:

Image Source: Zacks Investment Research

Historical research has illustrated that roughly half of a stock’s future price movement can be attributed to its industry group. Because it is ranked in the top half of all Zacks Ranked Industries, we expect this group to outperform over the next 3 to 6 months. By focusing on stocks within the top industries, we can provide a constant ‘tailwind’ to our investing success.

The industry also boasts a large number of highly ranked stocks per our Zacks Rank, serving as another confirmation signal that this group is a great place to be. Let’s take a look at a Zacks Rank #2 (Buy) stock that is outperforming the market and recently hit new 52-week highs, all while the major averages hover in a deep correction.

Southern Co. (SO Quick QuoteSO - Free Report)

The Southern Company is engaged in the generation, transmission, and distribution of electricity. SO also develops, constructs, and manages power generation assets, including renewable energy projects ang gas pipeline operations. The company owns or operates 30 hydroelectric generation stations, 3 nuclear stations, 45 solar facilities, and 15 wind facilities. The Southern Company is based out of Atlanta and serves approximately 8.7 million electric and gas utility customers.

SO has surpassed earnings estimates in each of the past four quarters, delivering a trailing four-quarter average earnings surprise of 9.41%. The utility company most recently posted Q2 EPS back in July of $1.07/share, a 27.38% beat over the $0.84 consensus estimate. The stock has performed admirably this year, with shares up nearly 13%.

Image Source: Zacks Investment Research

Analysts have increased their full-year EPS estimates by 1.96% in the past 60 days. The Zacks Consensus Estimate is now $3.64 per share, translating to potential growth of 6.74% relative to last year.

Make sure to put SO on your watchlist and keep an eye on the utility space.