Read the publisher's guidelines carefully and look at other works in their catalogue. Are they accepting submissions in your genre and word count? Would your book sit well alongside others they’ve published?
Do an Internet search on the publisher. How long have they been in business? Are any authors you know signed with them? What are people saying about them in discussion groups? Of course, you never know what the future will bring for any company, but if you see from the start that people online are talking about non-payment of royalties, or anything else that doesn’t sound good, steer clear.
Ask to see a sample contract and check how much and when you’ll be paid. Make sure this is commensurate with other publishers.
Also in the contract, you’ll want to confirm what rights you’ll sign away. Ensure you understand and are happy with the terms. Don’t get caught out!