If history is any indication, software giant Microsoft (NASDAQ:MSFT) is about to announce an increase to its quarterly dividend. After all, Microsoft has announced a dividend increase around September for eight years in a row.

Here's a close look at why investors should expect Microsoft to announce yet another dividend increase this fall -- and what to expect from this year's likely dividend hike.

A bar chart with an arrow highlighting a growth trend.

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Microsoft's dividend track record

Ever since resuming dividend increases after they were temporarily paused in fiscal year 2010, Microsoft has increased its dividend every year since. During this time, Microsoft's quarterly dividend has risen sharply, climbing from $0.13 to $0.42, highlighting management's dedication to its dividend. 

Over the past five years, Microsoft has averaged annualized dividend growth of 13%. But the company's dividend increases have decelerated recently. Last year, Microsoft's quarterly dividend only increased by 7.6% to $0.42, or $1.68 on an annualized basis. There was a single-digit dividend increase in 2017, too; the company's payout rose by just 8.3%.

Expect a dividend increase in fiscal year 2019

Combining this dividend history with Microsoft's recent strong revenue growth and operating income growth means another dividend hike is all but certain at this point; Microsoft has been firing on all cylinders. In the company's most recent quarter, revenue increased 17% year over year and operating income surged 35%. Capturing the company's strong momentum in Microsoft's fiscal fourth-quarter press release, CFO Amy Hood said, "Exceptional sales execution delivered double-digit revenue growth across all segments and strong progress against our strategic priorities, anchored by commercial cloud revenue growing 53% year-over-year to $6.9 billion." 

Microsoft's strong business performance can easily support a higher dividend.

Further supporting the case for yet another dividend increase from Microsoft this year, the company has a low payout ratio of just 43%, leaving plenty of room for dividend growth.

Of course, dividend investors should keep their expectations in check regarding the rate at which Microsoft will likely increase its dividend by. With two years in a row of single-digit dividend growth rates, the company may opt to be conservative with its dividend increase yet again. On the other hand, Microsoft's recent strong performance could mean the company's dividend increase reaccelerates -- but investors shouldn't count on it.

Investors should expect the software giant to announce a dividend increase sometime in the second half of next month. Last year, Microsoft announced its dividend increase for fiscal year 2018 on Sept. 19, 2017. This timing was in line with the company's Sept. 16, 2016 announcement of its higher dividend for fiscal year 2018. The higher dividend announced last September was payable on Dec. 14, 2017, with an ex-dividend date of Nov. 15, 2017.

This article represents the opinion of the writer, who may disagree with the “official” recommendation position of a Motley Fool premium advisory service. We’re motley! Questioning an investing thesis -- even one of our own -- helps us all think critically about investing and make decisions that help us become smarter, happier, and richer.