The FTSE 100 shares look good to me and I would consider buying them now

One strong feature to pay attention to when choosing FTSE100 shares to buy is a growing annual dividend.

I found a company with a decent record of dividend expansion and strong forecasts from City analysts for further growth in the future. The compound annual dividend growth rate is currently at a respectable 14%.

Constant trading

The company operates in a stable, defensive pharmaceutical sector. I like this because it helps me avoid some of the volatility associated with more cyclical sectors.

Nevertheless, all companies and stocks carry risks, but also positive potential. For example, one thing I’ve noticed about defensive companies – like pharmaceuticals – is that their popularity with investors can ebb and flow.

This can lead to valuations and earnings multiples rising and falling over time. So the stock prices of defensive companies sometimes fluctuate up and down, even if their underlying companies continue to trade steadily. In this sense, shares of such companies can sometimes look a bit cyclical.

But when defensive company valuations are modest, it’s often a good time to strike. The FTSE 100 company I’m targeting at the moment – that’s the drumbeat – is Hikma pharmaceutical company (LSE: Wandering).

The company develops, manufactures and markets generic, branded and licensed pharmaceutical products, including injectable drugs. The business is international, and the company’s dividend data shows that the company looks to be thriving.

Dividend payments to shareholders are projected to more than double by 2025 compared to 2018. If this progress continues in the coming years, it’s possible that Hikma Pharmaceuticals could be a useful addition to my diversified long-term portfolio.

Decent potential in the long run

But can the company continue to grow? Well, in August the company published a decent set of half-year results with optimistic forecasts. Meanwhile, analysts are forecasting modest single-digit percentage growth in revenues and profits averaged this year and next.

I would say progress looks more like work than excellence. However, the stock price chart reflects this situation.

The company increases its revenues organically and through complementary acquisitions. However, it is not the only operator in the industry, so one of the threats is competition from other players. Moreover, profits have struggled to grow in recent times due to supply chain disruptions and cost-inflation pressures that many companies have faced. There is some risk that such difficulties may persist.

However, with a share price of close to 1,913p, the forecast 2025 dividend yield will be just over 3%. I think this is a fair valuation for a company that has a history of strong dividend growth.

Therefore, despite the risk, I would be happy to conduct further and deeper research now to buy some shares due to their long-term potential.