Buying high-quality dividend stocks and holding them for long periods can be a powerful approach to building wealth. When a stock's cash distribution is reinvested, after all, shareholders can take advantage of the magic of compounding.

Dividend-paying pharma stocks have a well-earned reputation for being some of the most potent wealth builders within the category. The core reasons are these companies operate in a high-growth industry, serve a growing and aging population, and generate enormous free cash flows every year.

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Source Fool.com