DDM, or dividend discount model, is a financial valuation method used to determine the intrinsic value of a stock based on its expected future dividends. It takes into account the present value of all future dividends and discounts them back to their current value, providing investors with an estimate of what a stock is truly worth. This model is based on the belief that the value of a stock is directly tied to the dividends it pays out, making it a useful tool for long-term investors looking for stable and consistent returns. DDM is often used in conjunction with other valuation methods to provide a more comprehensive analysis of a stock’s potential.