Investors use the dividend discount model primarily to evaluate:

The dividend discount model (DDM) is a valuation method used by investors to determine the intrinsic value of a company's stock based on the expected future cash flows derived from its dividends. This model operates under the premise that the value of a stock is the present value of all future dividends it will pay to shareholders. Therefore, by focusing on future cash flows specifically from dividends, investors can assess whether a stock is undervalued or overvalued based on its current market price.

This approach doesn't evaluate current debts and obligations directly, nor does it primarily assess the operational efficiency of the business or overall market trends. Instead, the DDM is centered around the dividends expected from the investment, making it an effective tool for investors who prefer dividend-paying stocks and want to forecast their potential returns based on those future payouts.