How should we choose our friends according to Islam?

We should choose the friend that believes in and abide by our religion 
(Islam)And gives great respect to what Allah (SWT) and Prophet 
Muhammad (saw) Had ordered us. And we should stay away 
from the one who is not well mannered and gives no attention 
to what Islam is about or what pleases or displeases 

Allah (SWT), for he will surely affect us negatively. 

There is no good if the companion drowns us in sins and displeasing 
Allah (SWT). The bases for the actions of those who follow 
the evil ways are corrupt; their actions are built upon misguidance 
and deviation.

Good friends are those who share with their companions both 
happiness and sadness. If we share our feelings with the wrongdoers 
whose actions are worthless and based on corruption, then 
we are following the same ways and standards as they are doing, and 
we will end up being as corrupt as they are, and then we are in a 
big trouble, how can we face Allah's (SWT) dissatisfaction and displeasure? 

Instead of making friends with the misguided ones we should 
befriend the righteous, yet treat the rest in a gracious and just manner. 
Staying at sufficient distance is necessary; yet treating everybody 
in a noble and kind manner is required.

The danger of having corrupt friends isn't confined to the worldly life. 

Such friendships produce repentance on the Day of Resurrection, too!

Allah (SWT), the Exalted says in the Noble Qur'an: 

"And (remember) the day when the unjust one shall bite his 
hands saying: O! Would that I had taken a way with 
the Messenger! O woe is me! Would that I had not taken 
such a one for a friend! Certainly he led me astray 

from the reminder after it had come to me;" 

(Surah Al-Furqan, 25:27-29)

The two main regrets on the day of judgement are 

(1) Not following Prophet Muhammad (saw) on the path of guidance 
and (2) Befriending a person who diverted one from the truth.

Imam Ali ibn Abi Talib (as) has said: 

"The felicity of this and the next world lie in two things: 

firstly, keeping secrets; and secondly, friendship with the good. 

And the miseries of this and the next world are summed up in 
two things: firstly,divulging secrets; and secondly, friendship 
with wicked persons."

So take heed before the inevitable day of judgement comes 
and we are reckoned for our acts. Allah (SWT), 

the Exalted says in the Noble Qur'an: 

"Friends on that Day will be enemies one to another, except 
al-Muttaqun (i.e. those who have Taqwa/Piety)." 
(Surah Az-Zukhruf, 43:67)

It is wise to choose moderation in dealing with friends. 
Excessive love and confidence in friends are unacceptable since it 
happens that a friend may change into an enemy and use the secrets 
that he had shown as weapons.

Allah (SWT), the Exalted says in the Noble Qur'an: 

"And cooperate in righteousness and piety, but do not cooperate 

in sin and aggression." (Surah Al-Maeda, 5:2)

Imam Ali ibn Abi Talib (as) said: 

"When you cherish someone you should cherish him moderately 
for he may be your enemy someday, and when you hate someone 
you should hate him moderately for he may be your 
friend someday." Also said: "If you intend to cut yourself off from 
a friend, leave some scope for him from your side by 

which he may resume friendship if it so occurs to him some day."

Imam Jafar Sadiq (as) said: 

"The secrets that you must show before your friends are 
only those through which your enemies cannot harm you, 
for a friend may change into an enemy."