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First priority for me is making sure they've passed Breeding Advice (and Strict Breeding Advice if you're a premium member). After that, for stallions I always test them against their sires and only keep/use stallions that are superior to their sires.

After that really the only thing you can use to estimate breeding ability is AFPT or comparison testing stallions against each other. I personally don't have a premium upgrade so to get AFPT I have to do the math myself - usually not worth it for me to take the time. If I have too many stallions (which happens basically every season) I'll comparison test them against each other too to eliminate some of them (keeping any that test superior to the others and gelding the inferior ones).

If I have a colour or size theme for the line of course I'll also cull breeders that don't meet those requirements but it really has nothing to do with breeding quality.

Mainly, to determine if a horse'll probably be a good breeder I'll compare its paper level to its generation and see if it stands up to my requirements (ex: second gen red/B).