NextEra Energy Partners (NEP -0.89%) is closing in on the funding needed to refinance its debt due early next year, and markets are applauding the added certainty. Shares of NextEra Energy Partners were up 5% as of 11 a.m. ET, and shares of parent NextEra Energy (NEE -1.36%) were up nearly 3%, on the deal and positive commentary from one Wall Street analyst.

2024 comes into focus

It has been a tough year for holders of NextEra Energy Partners. The company, a master limited partnership (MLP), or yieldco, is highly reliant on debt to fund its business model. Higher rates have eaten into profitability, causing a midyear profit warning that caused the stock to fall about 75% from its all-time highs and down 60% in 2023.

NextEra Energy, its electric utility parent, has done better but is also down about 30% for the year. One of the key questions lingering over NextEra Energy Partners is whether its dividend is sustainable as some of its loans come up for refinancing.

On Tuesday, NEP priced a private offering of $750 million in unsecured notes at 7.25%. The net proceeds will be used to repay 4.25% senior notes due in July and September 2024 as well as borrowings outstanding under NextEra Energy Partners' revolving credit facility. The borrowing rate is a bit higher than what Wall Street had expected, but the markets appear to be cheering the added clarity about how NEP will deal with its debt.

Both companies also got a positive mention from Guggenheim. The investment bank raised its price target on NextEra Energy to $70 from $65 and reiterated its buy rating, saying the company's Florida utility remains "an underappreciated growth vehicle." The bank lowered its price target on NEP to $37, from $42, but kept a buy rating on the shares.

Down big in 2023, are NextEra Energy and NEP buys?

These two companies have similar names and a shared heritage, but investors should consider them separately. Of the two, NextEra Energy appears the safer bet thanks to its regulated utility business and its significant portfolio of renewable energy assets. NextEra Energy could require some patience, but investors buying in today are likely to be glad they did in the years to come.

NextEra Energy Partners is a bit more of a wild card. Its current 13% dividend yield looks enticing, but the yield is high in part because Wall Street is betting the current dividend is unsustainable. Management is trying to prove naysayers wrong, but investors seeking income should be aware that even after the private offering of notes, NEP still has a rocky path ahead.

NextEra Energy has a relatively modest yield by comparison, paying just 3% right now. But given its better risk profile, it is the better stock to buy right now for those looking to add to their energy exposure.