I am not an expert in stock trading, nor do I involve myself in stock market affairs. Even then, I would want to share what I have known about the concept through my reading and general understanding of the topic.
Check Past performance
Though the companies add a disclaimer that past performance does not guarantee future results, it is not always true. For a better prospects of a company in share market, past performance is indeed the key. Not that it needs to be strong performer year by year, but you should definitely look for the consistent performance in the long run.
Cap means a lot
Make it a point to invest in mid cap large cap stocks. Avoiding the small cap ones would be advisable. If you are compelled to choose a small cap stock, choose the one that conforms to the best of the breeds tag.
Look for a company that has a better net gain over the years. A company that has a steady earnings growth can be a good choice. The gain need not be any huge, but I would expect it to be consistent and steadily increasing if I were to choose a particular stock.
Placement of the firm
Check the status that the company enjoys in comparison to the others in the same genre. Check the concerned industry as a whole and then find the relative position of the company in that scenario.
It would also be practical to pay attention to how is the company managed. Do check the general perception about the company and its overall management. If there are any issues faced in the past, analyse the way the company found its way out of them.
Stability and dividends
These are the two factors that go hand in hand. You will need to analyse the dividend paying patterns of the firm chosen by you. However, high dividends may not be a good sign. It may indicate an impending instability.
Live....and Let Live!