By the freewheeling standards of MLPs, gas distribution utilities might at first seem deathly dull. The yields are in the neighborhood of 2-3% and growth prospects in the best of times much more modest than for the infrastructure supporting domestic energy production.

Gas distributors are heavily regulated and tend to retain more of their cash flow than MLPs, which means they don’t need to sell as much equity or debt to finance growth.

So why have these turtles dramatically outperformed the MLP hares over the last few years? And how is it that so many have fetched 30%-plus premiums in multi-billion-dollar-deals?

There’s an easy answer for those willing to step into the uncomfortable shoes of the typical acquirer, a predominantly electric utility.

There has been no growth in U.S. power demand for the last decade: the country used less electricity last year than in 2007.

Some of that was the result of the ongoing efficiency gains in the commercial and residential sectors from newer appliances and the like. Industrial demand, meanwhile, has flagged notably.

Natural gas consumption trends and demand forecasts have been brighter, helped by the low prices prevailing in recent years.

And as if stagnation weren’t challenging enough electrical utilities are also confronting the prospect of technological disruption as the improving efficiency of solar panels and power storage technologies threatens to turn the centralized electric grid into a relic.

Diversifying out of all this gloom-and-doom and into another sector regulated on a cost-plus model but with actual growth is what passes for a corporate no-brainer these days.

And so one by one the gas distributors are getting gobbled up and shares of the ones that haven’t yet have been among the market’s strongest.

I’ve noticed because we’ve recommended one such LDC (local distribution company) for years. UGI (NYSE: UGI) is more than that, of course, as a trans-Atlantic marketer of propane as well as a Marcellus midstream player. But those growth investments have been made from profits UGI earned on its core gas distribution franchise in Pennsylvania.

The Conservative pick has returned 89% for our portfolio in a bit more than three years, years that included an epic energy bust. Distributors like UGI tend to benefit when natural gas (and propane) prices are low, since that spurs demand and props up margins.

UGI remains an attractive long-term investment and a potential acquisition target. And there are other gas distributors that also stack up well against MLPs on fundamental valuation measures like cash flow multiples and return on equity.

Those serving regions with growing population and within easy reach of natural gas wells are the best long-term bets.

Dallas-based Atmos Energy (NYSE: ATO) meets both criteria. Atmos pipes gas to 3.2 million customers across eight states, but Texas accounts for roughly two-thirds of its asset base and profits.

Source: company presentation

Its service territory blankets the Barnett Shale and extends to the Permian Basin in the west, the Eagle Ford in the south and the Haynesville to the east.

Capital spending is promptly rewarded with regulated double-digit returns on equity. In the fiscal year completed in September Atmos paid out roughly half its net income in dividends. Cash from operations net of dividends covered 57% of capital spending, with debt and equity offerings accounting for the rest.

The dividend currently yields an annualized 2.3% and was increased 7% for 2017. Atmos is aiming to increase its earnings per share 6-8% annually through 2020. Buy new Conservative recommendation ATO below $85.

Just to the north of Atmos is the home turf of ONE Gas (NYSE: OGS), the local distribution company spun off three years ago from ONEOK (NYSE: OK). ONE Gas serves 2.2 million customers in Oklahoma, Kansas and Texas, and its turf also overlays key gas production basins as well as growth hubs like Oklahoma City and Austin.

Source: company presentation

ONE Gas increased its dividend 20% for 2017 and plans annual hikes of 6-8% through 2021.

The stock yields 2.6%. Dividends consumed just over half of net income in the recently completed fiscal year, while cash from operations net of dividends covered 68% of capital spending. I’m adding OGS to the Conservative Portfolio with a buy limit of $72.

Las Vegas-based Southwest Gas Holdings (NYSE: SWX) supplies gas to its glitzy hometown as well as Phoenix and Tucson to the south. Arizona accounts for a little over half of the company’s 2 million customers and utility profits, while Nevada delivers 35% of the regulated bottom line and eastern California the remainder. Southwest also operates a large pipe construction subsidiary.

Source: company presentation

The dividend increased 10% for 2017, and the stock currently yields 2.4%. Cash from operations net of dividends covered 97% of capital expenditures last year. Buy new Conservative recommendation SWX below $90.