Should see more short covering before the dividend right?
Not necessarily. What it does say is that the business throws off enough cash that they can still use the current cash on hand plus cash flow to grow the business according to plans. Anything over what you need is just excess and piles up. Apple is a great example. They won't use half the cash they have OR half of what they generate in cash flow. Even so they could give half of both away and still grow faster then 90% of all co's.
Ultimately owning a stock is owning a business. Businesses exist to make money for shareholders and employees. The only way a shareholder can get money out is from dividends or share appreciation (or both). In the abscence of share appreciation the business should issue a generous dividend. Eventually if it is safe and grows the share price will follow. A stock like GME will be held down by shorts until they go bankrupt in 10 years. However GME could pay out their whole market cap in 10 years thus taking away all long risk!