The Dividend Discount Model (DDM) is a financial valuation method used to estimate the value of a company's stock based on its expected future dividends. It assumes that the value of a stock is the present value of all future dividends that the company is expected to pay to its shareholders. This model is particularly useful for companies that consistently pay dividends. To apply the DDM, investors typically use a formula that discounts future dividends back to their present value. The model can be adjusted for growth rates, making it suitable for companies with stable or predictable dividend growth, such as those in the utilities or consumer staples sectors.